Greenblatt's Magic Formula vs Carlisle's Acquirer's Multiple

When I see magic formula's list, I can stomach buying those companies. When I see Acquirer's Multiple list, they're just cheap companies relative to operating earnings, low ROIC businesses with poor economics (mining, oil, gold).

Any one have a different take?


  • Well, that is what drives the return. The behavioral aspect of not wanting the hated companies drives the share appreciation. The key is to buy a batch of those, you can not cherry pick them. It is the modern day net net approach. Since net nets in the u.s do not really exist anymore, buying a batch of these is about as close as you will get.
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