Newsletter - April 1st, 2023

Dear Reader,

Attached is our latest list of stocks generated from basic value screens (low p/e, ev/ebitda, debt/equity, etc.), which don’t meet our investment criteria - and our reasoning.

This may help you avoid a few ‘value traps’ or stocks that aren’t sufficiently attractive compared to the opportunities available today.

For reports of stock ideas that pass our quantitative and qualitative standards, join at the link below:

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Notes from 2012 Berkshire AGM below:

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2012 Berkshire AGM

Notes at timestamps below:

1:16:30 The best game in the world

Buffett highlights a few egregious mistakes by Mr. Market in the past.

Mr. Market is the most obliging partner; you don't have to do anything and you have the option to exploit it when it suits you.

The market is there to serve you, not to instruct you - form your opinions on the value of businesses from their operating data and financial position not the price action.

1:21:45 "But stocks were cheap"

WW2, systemic risks, so what? Stocks were cheap. Trumps almost everything.

Play for tomorrow - keep enough in liquid reserves to play out the game.

1:34:30 "Reasonable" pre-tax multiple for non-insurance businesses

9-10x pre-tax earnings under 2012 conditions for operating businesses with similar competitive characteristics in Berkshire's stable.

2:38:30 'Understanding' businesses

To Buffett's mind, this entails having a reasonable fix on earning power and competitive position in 5-10 years - something to strive for.

3:02:30 Layers of safety

Don't stretch on safety for additional gains. Never want to go back to 'Go'.

3:06:15 Northern Pacific Corner

Historic event where short sellers were squeezed to enormous pain. The stock shot up from $170 to $1,000 because short sellers couldn't find floating stock to cover.

https://globalfinancialdata.com/complete-histories-northern-pacific-the-most-famous-stock-corner-in-history

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Until next time, Cheers!