Newsletter - June 15th, 2024

Dear Reader,

Attached is a recent list of stocks that passed value screens (below net current asset value, low price/tangible equity, low ev/ebitda, etc.) but 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:

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Nick Train and Terry Smith

Some notes from recent weeks below:

Nick Train

https://www.youtube.com/watch?v=_SFdHO_oMkE

4:45 Proprietary data

Train suggests companies with proprietary data to which it can apply AI tools may offer attractive prospects at lower valuations than pure AI companies.

11:00 Diageo Thesis

Train looks for "multi-decade" industrial growth stocks. Diageo offers premium spirits in demand from wealthy consumers, which he asserts is a multi-year tailwind.

22:15 Underperformance/Active investing

Even the best investors with long-term outperformance can underperform for years at a time. The key is to have a sensible investing strategy and stick with it.

Terry Smith

3:15 Redundant words

"Never say something if you wouldn't say the opposite" - some amusing examples of corporate speak.

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Wish you an excellent week ahead.