The Acquirer’s Multiple | Tobias Carlisle

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The book is about how investors like Warren Buffett and Carl Icahn have successfully used the phenomenon of “mean reversion” and how an investor with a deep value strategy can systematically use it. “The Acquirers Multiple” (AM) is the EV/EBIT multiple. Carlisle got the idea for AM when he backtested Joel Greenblatt’s “The Magic Formula” (which uses EV/EBIT and EBIT/IC to sort out “wonderful companies at fair prices” and found that the use of EV/EBIT alone outperformed “The Magic Formula”.

A Brief of the book can be read here.

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