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Newsletter - December 30th, 2023

Dear Reader,

Attached is our latest list of stocks passing value screens (low EV/ebit, high returns on invested capital, 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:



Templeton Vancouver Speech

Notes starting from the "much less important subject" of investing (44:45) below:

45:00 Expect bear markets/recessions

Psychologically prepare for roughly two bear markets every 10 years.

49:00 Principles

a) Being contrarian in stocks requires the greatest fortitude and brings the greatest rewards;

b) Diversify across stocks, industries, and countries for greater safety of principal.

50:00 Uniqueness of Investing

Unlike other fields such as medicine, buying what most investment professionals recommend isn't the route to investment success.

51:00 Value

Invest intelligently based on value received vs. outlook/trends.

52:00 Selling policy

Sell only when you have a much better bargain. For our stock ideas, remember to let the winners run as much as you can - that's where we've observed the best results.

53:00 Price vs. Value

Share prices fluctuate widely compared to underlying business values. Exploit the extremes, which is what we seek to do buying the best undervalued stocks.

1:07:30 Value Yardsticks

Price/Normal Earnings is the most important observable yardstick though all results will be determined by Price/Future Earnings.

1:11:45 Government debt

Templeton makes an interesting point that government debt is never repaid, simply the interest - that's the nature of the current paper-money system. When inflation exceeds interest rates, you have a repressive monetary regime destroying the value of savings.

1:10:15/1:17:15 Inflation

It's US government policy to inflate the money supply by ~2%/year. In such a scenario, stocks and real estate at reasonable valuations provide the best protection against inflation not debt/fixed income investments.


For our best stock ideas:


Wish you a prosperous 2024 - and an excellent week ahead.


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