Re: In the spirit of stock recommendations
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One illusion often overlooked is that acquisitions inflate price-to-earnings multiples when the company being acquired is trading for less than the acquirer, which is almost always the case. It is thus possible to mask declining organic revenues through consistent acqusitions. As far as I know, Graham's analyses heavily depend on price multiples.
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What are you talking about? How does an acquisition "inflate price-to-earnings multiples"?
Also, it is possible to mask declining organic revenues through consistent acquisitions, but I don't think there's anything special about organic vs. acquired earnings growth. $1 of earnings is $1 of earnings, regardless of whether it was grown organically or acquired. You might believe that organic revenue growth is more persistent than acquired revenue growth, but that's an empirical question and is likely to be highly idiosyncratic.
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