The Acquirer's Multiple Quotes

“You have to be an independent thinker in markets to be successful because the consensus is built into the price. You have to have a view that’s different from the consensus.”
― Tobias E. Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“An economic franchise arises from a product or service that: (1) is needed or desired; (2) is thought by its customers to have no close substitute and; (3) is not subject to price regulation. The existence of all three conditions will be demonstrated by a company’s ability to regularly price its product or service aggressively and thereby to earn high rates of return on capital. Moreover, franchises can tolerate mismanagement. Inept managers may diminish a franchise’s profitability, but they cannot inflict mortal damage.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“Tom Peters’s 1982 bestseller, In Search of Excellence, is described as “the greatest business book of all time.”
― Tobias E. Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“ideas: We should know what the company does. What is its business? How does it make money? We should know what it owns. What are its assets? What does it owe? We should know who runs it and who owns it. Is management doing a good job? Are the big shareholders paying attention?”
― Tobias E. Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“Marine Salvage—A science of vague assumptions based on debatable figures taken from inconclusive experiments and performed with instruments of problematic accuracy by persons of doubtful reliability and questionable mentality” —C. A. Bartholomew, Mud, Muscle, and Miracles: Marine Salvage in the United States Navy, Department of Navy, 2010.”
― Tobias E. Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“the combined wonderful-company-at-a-fair-price strategy the Magic Formula.”
― Tobias E. Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“No strategy has ever failed in theory. Almost all have failed in reality.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“the company should own a real business. The business should have strong operating earnings with matching cash flow. Matching cash flows ensures the accounting earnings are real and not merely the figment of a clever embezzler’s mind. We look for signs of earnings manipulation. Companies that own science experiments or toys in search of a business model are for speculators. But weak current profits in a stock with a good past record offers a good chance for mean reversion in those profits.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“A good price implies a lopsided bet: a small downside and a big upside. The downside is small because the price already assumes the worst-case scenario. This creates a margin for error. If we’re wrong, we won’t lose much. If we’re right, we’ll make a lot. An upside bigger than the downside means we breakeven, even if we err more often than we succeed. If we manage to succeed as often as, or more often than we err, we’ll do well.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“the only way to get a good price is to buy what the crowd wants to sell and sell what the crowd wants to buy.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“This is a simple method for investing systematically: Research: Ignore any stocks you do not want to own for any reason. Hold at least twenty stocks for diversification. Buy: It’s best to buy all your stocks at once. But it’s fine to scale in—make regular portfolio purchases over twelve months. One way to do it is to buy two or three stocks each month. Sell: For taxable accounts, hold winners for one year plus one day. Then sell. That maximizes after-tax returns. If a stock is up and still in the screener after one year and one day, hold until it leaves the screener. If a stock is down and in the screener, hold. If a stock is down and leaves the screener, sell. You should check your stocks at least quarterly to see if you need to buy or sell. Rebalance: Once you sell a stock, buy the next best stock in the screener you don’t already hold. The website acquirersmultiple.com has a screener for deep-value stocks listed in the United States and Canada. Sign up with the coupon “ZIG”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“One simple rule for beating the market is to buy a portfolio of undervalued stocks. The acquirersmulitple.com website is a good source of ideas. The most undervalued names in the biggest one thousand stocks are available in the Large Cap Screener for free forever.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“Highly profitable stocks only beat the market if Buffett’s moat protects the profits. Without the moat, highly profitable stocks will get beaten up by the competition. Mean reversion acts on profits to drag down winners and push up losers. Investors should use some common sense and natural skepticism about profit charts that march all the way to heaven.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“If you want the market return, buy the market. If you want to beat the market, you must do something different. That means buying only undervalued stocks, or concentrating.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“Why do fair companies at wonderful prices beat wonderful companies at fair prices? Because great businesses don’t stay great. They only look great at the top of their business cycle. Mean reversion pushes great business back to average.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“Oppenheimer’s second finding is his most interesting one. He split the stocks into two groups. One had only profitable stocks, and the other, only loss makers. Oppenheimer found the loss makers beat the profitable group.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“In my opinion, you have to be wildly optimistic to believe that corporate profits as a percent of GDP can, for any sustained period, hold much above 6 percent. One thing keeping the percentage down will be competition, which is alive and well.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“They beat the market by 41 percent over four years.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“It’s easy to see why the undervalued stocks were undervalued. Profits fell 30 percent in three years before they were picked. Investors expected those profits to keep falling.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“Our statistical screens are merely exploiting a group of undervalued stocks that are easily identified and are further protected by strong balance sheets and large asset values.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“Contrarians Expect Mean Reversion”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

“You pay a very high price in the stock market
for a cheery consensus.”
― Tobias Carlisle, The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market