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Newsletter - January 13th, 2024

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: Pinnacle CNN Interview (1995)


Notes below (and enjoyed the vintage ads):



3:15 Be different in investing


If you want superior investment performance, you must not buy what others buy.



4:00 Traits for success


Common sense, self-control (saving what you earn), and intelligent investing in stocks.



4:30 Avoid borrowing (generally)


Templeton famously borrowed $10k (on $50k savings) during the 1929 depression to buy over 100 stocks selling below $1/share. Only 4 proved worthless - and the overall sum quadrupled.



6:00 Point of maximum pessimism


Buy value where others are despondently selling, and "wait patiently for the outlook to change".



10:45 Two bear markets every 12 years


Psychologically prepare for them.



11:15 Selling policy


Templeton formulated his policy "over a whole lifetime": Sell only when you find a significantly better bargain ("at least 50% cheaper in relation to value").


If you try to price the market and sell a substantial proportion of your portfolio to avoid (another) bear market - a mistake we've made in the past - it's possible to miss out on meaningful gains, and perhaps impossible to re-enter at a better price.


 

For our best stock ideas:

 

Wish you an excellent week ahead.

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