The best book I ve read this ear case studies coupled with academic findings just how I like my theory reading This book is borderline repetitive regarding the concept of mean reversion but at the same time it is a treasure trove of counter intuitive data on market beating deep value portfolios This is a collection of very detailed historical case studies with an interesting investing thesis hidden between the lines and in the last chapterI enjoyed it though would prefer thesis less history Carlisle makes the case for intrinsic value relative to earnings or the inverse the acuirer s multiple as the only measure of value worth pursuing The author rushes through analyses which makes it difficult to follow the logic at times but provides copious supporting data for his argument in the form of charts tables and other figures so the reader can follow along visually In the first half of the book Tobias Carlisle compares various metrics used to identify deeply undervalued stocks and presents cases from empirical research that show deep value stocks in general outperform growthuality stocks This outperformance is attributed to the phenomenon of mean reversion In the second half and the interesting one Tobias really gets to the heart of deep value investing by depicting cases of deeply undervalued companies from the real world and narrating how corrective forces helped unlock their value companies from the real world and narrating how corrective forces helped unlock their value the shareholders Great summary of all forms of value investing their origins evolution and the world today Starts reading like a research paper towards the end but I don t mind it Hands down one of the best books I have read to this date read it twice in 6 months it offers counter intuitive ideas and facts and backed by uality statisticsLong version reviewMean reversion in business is pervasive can think of cyclical nature of businesses High return businesses attract competition and drives down return to the point where the invested capital can no longer make any profit or even endure loss some in the industry then choose to exit and so the returns move gradually to the peak again in a cruel irony the peak again In a cruel irony find capital in abundance both from retained earnings and outside investors when they need it least and scarce when they need it most In light of this when we find a company increasing its CAPEX during trough ears it may be a good investment opportunity as it might be a shining star when the relevant industry starts seeing some improvementThe book also shows how activismcreates enormous values for investors citing examples from Carl Icahn and other prominent investors It suggests that Graham net current asset value strategy though has limited applications and Acuirer s multiple can be used to identify company which have characteristics that typically attract activists undervaluation large cash holdings and low payout ratios hence providing asymmetric market beating returns However it has be noted that these companies usually have poor trends of earnings which make us hard to buy into it psychologically Buffett. The economic climate is ripe for another golden age of shareholder activism Deep Value Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations is a must read exploration of deep value investment strategy describing the evolution of the theories of valuation and shareholder activism from Graham to Icahn and beyond The book combines engaging anecdotes with industry research to illustrate the principles and methods of this complex strategy and explains the reasoning behind seemingly incomprehensible activist maneuvers Written by an active value investor Deep Value provides an insider's perspective
are the consistent bet It seems that the uglier the fundamental business trendthe consistent bet It seems that the uglier the fundamental business trend better the return even when the valuations are comparable This is deep value investing Reason Mean reversionSome interesting factssentences1 Apple Inc was a net net stock back in October 2002 It possessed 78 per cash net of all debts Inc was a net net back in October 2002 It possessed 78 cash per cash net of all debts was sold at 72 Mean reversion in the markets looks a lot like the gambler s fallacy made real movements in security prices individually and in aggregate tend to be followed by subseuent price movements in the opposite direction3 LowNo Growth Value Stocks outperform High Growth Value Stocks This is a fascinating finding Intuitively we are attracted to high growth and would assume that high growth value stocks are high uality stocks available at a bargain price The data show however that the low or no growth value stocks are the better bet It seems that the uglier the stock the better the return even when the valuations are comparable4a Profitable Net Nets underperform Loss Making Net Nets 4b Dividend Paying Net Nets underperform Non Dividend Paying Net Nets5 Buffett concluded from his experience with Berkshire s relentlessly lossmaking textile business that Should ou find Mille et un champignons yourself in a chronically leaking boat energy devoted to changing vessels is likely to be productive than energy devoted to patching leaks 6 The research shows that the typical company targeted by activists has poor recent stock performance a low valuation a large cash holding and few opportunities for growth Short version reviewSo what is the implication of this book for us in real life what is the practical useBuy companies with low Acuirer s multiple as data has shown in aggregate they will outperform any other metrics Explanation low Acuirer s multiple stocks are the targets of activists creating enormous returns through shareholder engagements Even without activism mean reversion will work in favor of these stocks improving relevant industries in laterears thus boosting earning and stock prices surge conseuently An outstanding book that s shows and explains why traditional value strategies are still capable of producing market beating returnsWhat I liked about the bookVery simple and easy to read It s about 280 pages and doesn t have too much superfluous writing It s easy to read and understandBacked by empirical data that is a fairy large sample and is robustProvides a good understanding of the concept of mean reversion and its importance in investingWhat I did not like about the bookDoes not explain the acuirer s multiple as well as it could and should have I figured it out on my own but the book could have explained the formula a bit better and perhaps dedicated a couple pages to demonstrate an example of how it could be calculated from an actual companyThe books is expensive I paid abou. N shareholder activist strategies in a format accessible to both professional investors and laypeople The Deep Value investment philosophy as described by Graham initially identified targets by their discount to liuidation value This approach was extremely effective but those opportunities are few and far between in the modern market forcing activists to adapt Current activists assess value from a much broader palate and exploit a much wider range of tools to achieve their goals Deep Value enumerates and expands upon the resources and strategies available to value investors today and describes how the economic climate is allow.
Read & Download ✓ eBook, ePUB or Kindle PDF µ Tobias E. CarlisleT 60 dollars on I understand it s partly because it s an academic work kind of like buying an article in an investmentfinance research journal But 60 85 dollars going price is a bit excessiveReview summary Interesting and accessible book backed by empirical data Strongly recommend to intermediate to advanced investors particularly those of a value bent Extrapolation is instinctive while mean reversion is notIn the era of moat and growth investing this book provides much needed empirical evidence from across various time periods and markets on how Graham type of strategies still outperform almost all other approaches A must readWarning The book is like an academic paper with tonnes of surveys and data Not a very fluid read A line from the book Rats beat the MBAs sums up the point of this book If Faire l'amour de manire divine you re of the belief that biases cannot be controlled and that one cannot gain any competitive advantage over others by improving judgment and analytical skillou probably will agree with what Carlisle has to say This book basically describes an investing strategy that needs one to believe in as a concept mean reversion and invest in a diversified portfolio of stocks 30 to 50 without knowing a thing about the underlying businessesOn the other hand if ou re from the Munger school of thought doing individual stock research and developing a conviction from the Munger school of thought doing individual stock research and developing a conviction build a concentrated portfolio will make better sense and ou might find Il est temps d'agir (IC.ESSAIS) yourself arguing almost every important point Carlisle makes Of course the difference in this approach being thatou need to develop a good business acumen and do deep stock research to be able to develop a strong conviction in the first place Depending on our orientation ou will find this book to be either very useful or extremely useless I read the book twice once from the point of view of mean reversion based pure uant value diversified portfolio thinker and the other time from the research based business partner type concentrated portfolio thinker I wasn t really convinced about the performance numbers since I think backtests would be hard to replicate in real life Also it is too difficult to blindly rely on a strategy that has worked in the past without having strong reason to believe why the stock should outperform hence making one refrain from allocating a large portion of the portfolio to such investmentsThe explanations about the past performance of different strategies could ve been shortenedI must mention I did find value in the first half of the book where Carlisle describes different investing styles of Graham Munger Buffett Icahn and Greenblatt For anyone new to value investing this could be interesting especially since Carlisle writes well and has explained various aspects of value
investing in a good easily read manner His understanding of Munger and Buffett is also good a uality rare among uantsin a good easily read manner His understanding of Munger and Buffett is also good a uality rare among uants try to compartmentalise Munger and Buffett style into some strategy jargonAll
in all worth reading but I would ve preferred to spend less ifall worth reading but I would ve preferred to spend less if kindle version was available. Ing value investing to re emerge Topics include Target identification and determining the most advantageous ends Strategies and tactics of effective activism Unseating management and fomenting change Eyeing conditions for the next MA boom Activist hedge funds have been uiet since the early 2000s but economic conditions shareholder sentiment and available opportunities are creating a fertile environment for another golden age of activism Deep Value Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations provides the in depth information investors need to get up to speed before getting left behind. ,