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Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations , by Tobias Carlisle.

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Have you learned anything so far from it that you can share? I’m meaning to read more books on investing.

I’ve just started mate. Can’t add much to the description provided at the moment. But I believe it requires nerves of steel to invest in what some call cigar buts with a last puff in it.

The Icahn Manifesto
Corporate Raider to Activist Investor

  • The evolution of Carl Icahn in arbitrage, evolving to convertible arbitrage, to “arbitraging [and/or liquidating] closed-end mutual funds and the securities in the underlying portfolio […], [to] public companies with undervalued assets” (p.2).

  • The Icahn Manifesto: Icahn’s profitable solution for the principal-agency problem, identified by Adolf Berle and Gardiner Means:
    “It is our contention that sizeable profits can be earned by taking large positions in ‘undervalued’ stocks and then attempting to control the destinies of the companies in question by:
    a) trying to convince management to liquidate or sell the company to a ‘white knight’;
    b) waging a proxy contest;
    c) making a tender offer and/or;
    d) selling back our position to the company.” (Icahn, Apud Carlisle, p.4)

  • Activism in practice: Tappan Stove Company (pp. 7-12).

  • Security Analysis (not an affiliate link), by Benjamin Graham and David L. Dodd, the bible that paved the way for corporate activism and many practitioners like Thomas Mellon Evans, Louis Wolfson, and Leopold Silberstein; a glance at Warren Buffett’s unpleasant experience with activist investing with Dempster Mill Manufacturing Company; and Icahn’s debt and alignment with Graham-Dodd philosophy: liquidation value analysis, net current asset value, (or net quick assets, Evans style) (pp.12-17).