In this week’s QAV episode, we sit down with the ever-dashing Tobias Carlisle, founder of The Acquirer’s Fund (ZIG, DEEP), author of The Acquirer’s Multiple, and deep value maverick, to dissect the state of value investing in the era of AI-driven hype. We cover the brutal cycles of deep value, AI vs. human decision-making in funds, the madness of quantum computing valuations, and how Toby’s trip to China left him unconvinced by the West’s collapse narrative. We also drill into oil, Ford ($F), and the implications of passive investing’s stranglehold on market direction. Plus, Buffett worship, civil war exit strategies, and why Americans don’t get Aussie piss-taking.

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### **🕒 Timestamps & Key Topics**

**[00:00:00 ]** – Intro: “George Clooney of Value” and Toby’s current funds (ZIG & DEEP on NYSE)

– **[00:02:00 ]** – Deep value gets smashed by the AI mania & 2024’s brutal cycle

– **[00:03:30 ]** – Johnny Ive’s $6.5B deal with OpenAI despite not having a product

– **[00:06:00 ]** – The usefulness and limits of AI in investing

– **[00:08:00 ]** – Data quality issues in quant/A.I. models & risks of blind automation

– **[00:09:30 ]** – CEOs trained to manipulate investor perception

– **[00:10:00 ]** – Comparing QAV’s approach (OCF < 7) to Toby’s Acquirer’s Multiple (EV/Operating Income)

– **[00:11:30 ]** – Meta ($META) during its metaverse meltdown; AI boom echoing the dotcom bust

– **[00:12:00 ]** – Toby’s focus on oil & gas stocks in his fund strategy

– **[00:15:00 ]** – Oil cycles, OPEC+ manipulation, and US shale’s role

– **[00:16:00 ]** – Ford ($F): bleeding in EVs but still a value stock due to ICE cash flows

– **[00:17:30 ]** – Observations from Shanghai: Huawei’s EVs, $35K luxury cars, US auto at risk

– **[00:21:00 ]** – Why QAV ignores forecasts and focuses on real-time cash flows

– **[00:23:00 ]** – China’s economy: Does it look like collapse… or a 1900s US boom?

– **[00:26:00 ]** – Buffett, Zenner, and the case for ignoring macro

– **[00:30:00 ]** – Buffett’s honesty, marketing genius, and myth of “buy and hold forever”

– **[00:34:00 ]** – Musk, Tesla ($TSLA), and the new religion of tech investing

– **[00:36:00 ]** – Tobias’s fund benchmarks: Russell 1000/2000 Value vs. S&P500

– **[00:40:00 ]** – Market could go sideways for 15 years (again): Value thrives in churn

– **[00:43:00 ]** – Passive investing as a market distorting force

– **[00:47:00 ]** – Why buybacks work for value: AutoZone ($AZO), O’Reilly ($ORLY) case studies

– **[00:48:00 ]** – Franking credits vs. buybacks: US vs. Australian shareholder incentives

– **[00:49:00 ]** – US regulatory quirks: share classes, market makers, quarterly reports

– **[00:52:00 ]** – Licensing hurdles for fund managers who podcast

– **[00:53:00 ]** – Civil war in the US? Don’t believe the hype

– **[00:55:00 ]** – Cultural differences: why Americans think we’re all sarcastic bastards

– **[00:57:00 ]** – Tobias’s new book “Soldier of Fortune: The Ancient Art of Risk-Taking”

[00:00:00 ]
Cameron: Joined by the best looking man in value investing, the George Clooney of Value
Toby: Oh, keep it coming.
Tony Kynaston: Oh, the youngest, the youngest value investor. I know
Toby: Oh,
Tony Kynaston: we’re usually all old guys.
Toby: there’s, there’s no one left. How are you,
Cameron: Welcome.
Toby: Thanks. That’s a very
Cameron: Yeah. Good. Oh man, every time I see you, I’m like, how does he get to be so good looking? That’s not fair.
Toby: an app.
Cameron: sporting a little bit, a little bit more gray, a little bit more gray than the last time we talked, which was a couple of years ago, I think,
Toby: a, it’s that
Cameron: is
Toby: We’ll do it to you.
Cameron: I thought it was Trump’s tariffs that were doing it to you.
Um,
Toby: the news anymore. I switched it all off. So.
Cameron: So, uh, Tobias Carlisle from the Acquirer’s Fund, uh, the Acquirer’s Dilemma? No. What was the name of your book,
Toby: Yeah, the, the, uh, the last book was the [00:01:00 ] Acquirers multiple that came out in 2017, and the
Cameron: right.
Toby: Funds. I’ve got two they’re both ETFs listed on the NYC Zig, which is mid and large deep value domestic US, and Deep, which is small and micro deep value domestic
Cameron: they? Weren’t they zig and zag? No. Just
Toby: I, I’ve got somebody to put their foot on zag for me, but I don’t, I don’t have a zag fund. I probably would like to do an international or a global fund, uh, I
Cameron: right.
Toby: the two that I have. I need a little bit of, I need a little bit of a tailwind, I think, before I really launch another fund.
Cameron: So how’s the, how’s the funds going?
Toby: Um, they’re doing fine in their category, but the category is, is getting smashed. It’s the, it’s the curse of the deep value. It’s like all, all of these, all value, all strategies have their cycles, and this has been a very long one against value. Depending on how you measure it starts in [00:02:00 ] like 2010 or 11 or 15 and looked like there was a little bit of a bounce after 2020, but that AI.
News, you know, just crucified us since like the beginning of 24. And it’s been a little bit miserable since then. But I think that the values continue. It’s funny because the, it’s just multiple compression because the values tend to be quite good. I think the, the companies are getting healthier and healthier and looking better and better.
It feels to me like the early ni uh, the early two thousands, like, uh, after following the late. 1990s, which was a very growthy, large cap market, and it really left all of the small value stuff behind and the rest of the world behind. And then at some point that cycle’s changed. I think probably needs a crash to turn around, but, um, I’d be, you know, I’d be happy for it to happen without a crash.
I can tell you.
Tony Kynaston: Feels like the late nineties to me. All the AI stocks and the Mag seven stocks have been going up. [00:03:00 ] On, on forecast and predictions basically.
Toby: And that, um, you know, the, uh, what do they call it, the quantum computing, like there’s no, the, the, the market caps on those things are like seven or $8 billion they don’t do anything. They don’t even have a product. It’s pretty impressive.
I saw, you know, that open ai, it’s got like a hundred open AI’s a real business, like I think they’re probably still losing money, but it is a real business. People pay for that. You know, that little window that chat, GPT and you know, whether it can justify a hundred billion dollar valuation or not, I don’t know, but it’s good news for Johnny.
Ive, who was the bloke who, you know, he made the, the iPhone for, one of those, I think he was the iPhone of designer for Apple. And then he spun out and he’s created this consultancy. Like they don’t have a product or anything like that, they just consult. And OpenAI has picked them up for six and a half billion dollars, which is.
work if you can get it.
Cameron: It was [00:04:00 ] started Love, love from his consultancy. Was started last year. Started last year, just got it picked up. And Johnny wasn’t part of the deal. He, no, he’s, he’s gonna work for io, the new company that’s come out of the, the. Merging of open AI and love from as a consultant, consulting advisor or something.
But yeah, from zero to six and a half billion dollars in a year, not just the iPhone. I mean Johnny was the guy, sorry, apple fanboy here. Johnny was the guy behind the iPod, the iPhone, the iPad, the max, the original lolly Max, and when Steve came back and then the Mac books and everything. Cool that Apple. Did in that period when Steve was alive, was Johnny as leading the design team? So he is, uh, I mean, he, he stole it all from but, uh, all of the ideas from Braun but modernized it. So like he’s uh, he’s a genuine[00:05:00 ]
Toby: Credit where it’s due.
Tony Kynaston: From Bauhaus.
Cameron: guru.
Toby: he’s, good at
Cameron: Yeah. Yeah.
Toby: but I, I, I like the fact that their first product’s, like this hockey puck, no scream. And, and it’s basically Alexa, I don’t get it.
Cameron: Well, they haven’t, they haven’t actually said exactly what it is. They all, all they’ve said so far is what? It’s not Won’t have a screen. Yeah, it’s not a phone. But I think the, the, the assumption is, ’cause the rumors for the last couple years since he and Sam Altman have been working together is they’re gonna come out with a AI native phone to go up against the iPhone.
But, um, anyway, yes.
Tony Kynaston: edges, was his contribution to the iPhone. Yeah. I’m just marking off my bingo, my AI bingo card here. Uh, Tobias, it,
Toby: I’ve, I’ve
Tony Kynaston: the quick was a quick, uh,
Toby: This, uh, this
Tony Kynaston: i