The Acquirer's Multiple

The Acquirer's Multiple outlines a value investing strategy based on identifying undervalued companies through a specific financial ratio. Author Tobias Carlisle draws on research and market data to challenge conventional wisdom about stock selection and portfolio management. The book examines why famous investors like Warren Buffett shifted their approaches over time, and presents evidence for why certain value metrics work better than others. Carlisle provides a systematic framework for applying the acquirer's multiple strategy, including specific criteria for stock screening and selection. Through analysis of market history and corporate transactions, the text demonstrates how following the smart money - particularly corporate acquirers and activist investors - can lead to superior returns. The methodology is explained with real examples and practical implementation steps. This work represents an evolution in value investing theory, suggesting that mechanical approaches can outperform traditional fundamental analysis. The book's core thesis challenges readers to question established investing principles while offering an alternative systematic strategy.

Readers describe this as a focused explanation of Joel Greenblatt's "magic formula" investing approach, with Carlisle's modified metrics and strategy. The book teaches value investing principles for identifying undervalued stocks through the acquirer's multiple calculation. Readers appreciated: - Clear explanations of complex concepts - Practical implementation steps - Historical examples and backtesting data - Free online screening tools referenced Common criticisms: - Too much overlap with Carlisle's previous books - Could be condensed into a long article - Limited new insights for experienced investors - Some found the writing repetitive Ratings: Goodreads: 4.0/5 (500+ ratings) Amazon: 4.4/5 (300+ ratings) Notable reader comment: "Good primer on value investing but feels like a drawn-out blog post" - Goodreads reviewer Another reader noted: "The screening tool alone makes it worth reading, but the concepts aren't groundbreaking if you've read Greenblatt's work" - Amazon reviewer

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🔹 The Acquirer's Multiple is based on the same valuation metric used by activist investors and buyout firms to find undervalued targets for acquisition. 🔹 Author Tobias Carlisle manages Acquirers Funds, an investment firm that uses the principles outlined in the book to select stocks for its ETF (ZIG). 🔹 The strategy outlined in the book outperformed Warren Buffett's Berkshire Hathaway returns by about 2x over a 50-year period in back testing. 🔹 The book's core metric (Enterprise Value/Operating Earnings) was inspired by a variation of Joel Greenblatt's "Magic Formula" but simplified to focus on value rather than quality. 🔹 Carlisle's research shows that buying the cheapest stocks based on The Acquirer's Multiple and holding them for one year provided better returns than strategies focused on high-quality companies.