Warren Buffett's Magic Formula

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The magic formula is a quantitative expression of what Buffett does without his business analysis built into it. The really astonishing part was the return differences when you took out the need for high profits or high return on invested capital. It's surprising that what that says is that paying up for quality tends to not be a good idea, and you tend to get better performance just buying the cheapest stuff in the market.

IN THIS EPISODE, YOU’LL LEARN:

02:52 - Breaking down Warren Buffett’s strategy of “buying down wonderful companies at a fair price.”
02:52 - What the Acquirer's Multiple Investing strategy is.
08:35 - Why enterprise value is more useful than market cap to value stocks.
08:35 -The benefits of the Acquirer's multiple strategy vs Warren Buffett value investing strategy.
16:42 - How mean reversion works, what companies and financial metrics typically exhibit mean reversion.
29:28 - Why a competitive advantage is key for a company to sustain a high ROIC.
40:55 - What are things that investors mistake as being moats or sustainable advantages?
50:58 - How to implement this strategy and use the Acquirer's multiple stock screener.
And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Tobias Carlisle’s book The Acquirer’s Multiple.
Tobias Carlisle’s book Deep Value.
Tobias Carlisle’s book Quantitative Value.
The Acquirer’s Podcast.
The Acquirer’s Multiple.
The Acquirer’s Fund.
Related Episode: Deep Value Investing W/ Tobias Carlisle - MI025.
Related Episode: Warren Buffett, Charlie Munger, And Berkshire Hathaway W/ Adam Mead - MI084.

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