Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations

This was a very enjoyable read. You will read about how,among others, Icahn, thinks and operates.This is a history of activist investing as well as a guide to profiting from mean reversion. Not your first investment book but a good read.

Deep Value by Tobias Carlisle is an excellent book on contrarian value investing. The book suggests buying cheap stocks with fairly poor fundamentals such as declining sales, profits and return ratios than buying stocks with improving fundamentals. This counter-intuitive view is well supported by research by various researchers. The contrarian approach is not easy to practice but will help investors in understanding the superior returns produced by some of the successful investors. The superior returns earned by activist investors and their methods are also covered in detail. The investing style of Carl Icahn is analyzed at different stages of his career. The book will help investors with quantitative bent of mind. The book is more useful to experienced investors and may not suit investors who are new to investing.

Deep Value is all about extreme contrarian investing. This book goes beyond Dreman's Contrarian investment strategies and advocates techniques based on solid research that are completely un-intuitive. The author has described and explained the 60 year research based on various value factors. And identifies the one that works the best even among already good and predictive value factors. Carlisle also gives good case studies of American and New Zealand activist investors. What they look for when they select the stocks, how they unlock the value and benefit themselves and other minority investors.The author also touches on little bit of investor psychology and its implications.I found the book very useful. It presents solid research findings. Compares one method with another and identifies the best performing method. Frankly some of the findings were shocking to me. In stock market it is not what seems to be intuitive that works best. The reality is lot different than what believe to be true. For example....his analysis of magic formula emulating Buffet methodology and finding that ROIC is pulling down the returns rather than enhancing the return. You will make more money if you ignore ROIC and invest in absolute dogs of the market who are losing money for last many years!!!I am not sure how many investors will be able to implement some of the recommendations because you will need to go against very human grain....and become almost unemotional and objective machine executing trades which are stomach churning. Not sure if such humans exist though. Most people may find Buffet's method preferable although you may earn couple of points less in the market. At least you will be able to stick to that methodology because that intuitively makes sense to humans- Buy excellent companies at fair price and make them compound over years- -- like true businessman.But this book is a gem for true contrarians and misfits.

The book is a path in the financial world through a quantitative lens.It starts from Graham (Net net approach),pass to Joel Greenblatt work, go to behavioral economics and then land to Activist, the new frontier of people able to cause changing in companies.Seen the evidence (studies done and results), if you embrace the theoretical context you will start to invest in that direction, more value concentrated in comparison to quality.Buffet “wonderful companies” (as he says in the book) exist but they are really hard to find. At same time you suppose to have the same insight (hard belief or hard arrogance), I add. A great book, you need to read it if you follow the value strategy to invest

Deep Value is required reading for new and experienced value investors. Tobias' extensive research and thoughtful insights build upon Ben Graham's ground breaking work in the Intelligent Investor and Security Analysis. His discussion on mean reversion and the acquirer's multiple alone are worth the purchase price. I highly recommend it.