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Newsletter - April 20th, 2024

Dear Reader,

Attached is our latest list of stocks passing value screens (below net current asset value, tangible equity, etc.), which don’t meet our investment criteria - and our reasoning.

This may help you avoid some ‘value traps’, and stocks that aren’t sufficiently attractive compared to opportunities available today.

For reports of stocks that pass our quantitative and qualitative standards:



Steve Schwarzman: Academy of Achievement Interview

Notes relevant to investing from one of Steve Schwarzman's (SS) interviews below:

3:00 Market discrepancies

Look for wrinkles in markets - "something that has changed from the normal order" - these present opportunities for profit.

Our focus is on clear and convincing price/value discrepancies based on earning power and balance sheet value.

6:00 Facts and reasoning

On an investment thesis, if the facts and reasoning convince you, act on it.

As Ben Graham said at the end of the Intelligent Investor: "Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it - even though others may hesitate or differ."

8:30 Risk Management

When Blackstone bought Equity Office Properties ("EOP") from Sam Zell at the peak of the real estate cycle in 2007, they simultaneously sold half of the $40 billion holding on the same day as SS didn't want to take "one minute of risk".

A passive investor can manage his risk of loss by 1) demanding a margin of safety in each stock, and 2) diversification - to get the odds in his favor.

11:30 Rule #1

"Don't lose money" - it takes too long to make it back.

If you protect your downside, your alternatives are good.

We focus on such stocks with limited downside risk.

13:30 Other People's Errors

You will learn most from your own errors - but it's best to learn from others' errors as much as possible.

In this case, these were: 1) relying on government assurances, which they reneged on, and 2) having a powerful partner with different goals (getting re-elected).

58:45 London Dungeon

SS wasn't enthused about the business but his thinking was in terms of downside risk. At worst, the business stayed the same size and the cashflows continued - and they could dispose it for what they paid for.


For reports on the best investment values in stocks worldwide:


Wish you an excellent week ahead.


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