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Newsletter - February 24th, 2024

Dear Reader,


Attached is our latest list of stocks passing value screens (low P/E, low EV/EBITDA, 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:

 


 

Lord Lee: Investor Chronicle Interview


Lee is a frequent contributor to the Financial Times and is touted as the first 'ISA millionaire'. He's a private investor with over 60 years of experience. He likes to pick individual stocks and has a charming, old-fashioned approach to investing.


Some notes below:




6:30 Cash in hand


Investors may be better off holding some cash outside the stock market - as much as required to maintain his sanity in bear markets, and particularly, to prevent selling when prices decline.



9:15 Avoiding losses


Losing less on your losers than you gain on your winners is key - limit the downside risk.


There's enough money to be made in buying established, consistently profitable businesses with low debt, insider ownership, and paying dividends.


We try to buy these when they face short-term headwinds, and sell at bargain prices.



14:30 Common sense and Patience ...


Are the two traits you require in successful investing.


"And patience is the most important."



15:30 "Sitting on your ass"


Investors make their real money owning stocks, not jumping in and out.


And nobody gets it right every time - so diversify.



20:45 Importance of dividends


The investor earns his return in only one of two ways: 1) Capital appreciation and 2) Dividends. You can't predict 1), so it's worthwhile paying attention to 2).


Apart from paying your expenses, it allows you the luxury of ignoring Mr. Market - a crucial psychological advantage in investing.



38:00 Talking to management


Buffett mused about owning private businesses and working with managements he liked and admired - and earn a moderate return of 10-12%/year - in 1968 when he was about to close his partnership.


It's appealing to build relationships with management teams over time. Even if it impedes objectivity, it seems a rather pleasant way to operate.



 

For our stock reports:

 

Wish you an excellent week ahead.

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