Warren Buffett's Strategy of Buying Wonderful Companies at Fair Prices

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Tobias Carlisle: Warren Buffett's strategy of buying wonderful companies at a fair price is called the magic formula. He says that historically, it's extremely difficult to find sustained high returns and invested capital. Tobias asks why Berkshire Hathaway has one of the highest levels of long-term value in its portfolio. We Study Billionaires will be back next week with an exclusive interview with Ted Kopple.

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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