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Newsletter - March 18th, 2023

Updated: Mar 24, 2023

Dear Reader,

Attached is our latest list of stocks generated from basic value screens (low p/e, ev/ebitda, debt/equity, etc.), which don’t meet our investment criteria - and our reasoning.

This may help you avoid a few ‘value traps’ or stocks that aren’t sufficiently attractive compared to the opportunities available today.

For reports of stock ideas that pass our quantitative and qualitative standards, join at the link below:


Notes from 2013 Berkshire AGM below:


2013 Berkshire AGM

Notes at timestamps below:

1:17:45 Go where the competition isn't

The secret to Warren's success: buying small neglected stocks when the public was disillusioned with stocks in the early 1950s; getting out of the market when values weren't available in the late 1960s; using insurance float to buy privately owned businesses to hold.

1:36:30 Buying declining businesses

This can be worthwhile if bought at low enough prices to current earnings - Warren expresses an expectation of 10%+ after-tax yield buying declining newspapers.

2:00:00 Don't Covet

Don't follow the crowd; invest objectively - fundamental attitude to investment success. This is easier if you can create an environment where you don't feel the social pressure to participate in the latest market fads.

2:36:00 No Macro

No consideration of macro-economic factors - though we've learned the hard way that geopolitics must be factored in international investing. Apart from that, not overpaying for good businesses seems enough for investment success.

3:55:15 Small Sums

Looking at small securities, small discrepancies in certain situations, looking under a lot of rocks.

4:11:30 Social Media

Writing on impulse; and the poisonous effect on focus in doing meaningful work.

4:12:45 Identifying Frauds

No checklist but the way people present themselves; note the trend of reserves/other judgment areas before securities are sold to the public (and the opposite when managements buy in stock).

Industries with construction-in-progress/stage-of-completion accounting are naturally ripe for manipulation.

Also interesting to note that Buffett found older financial statements 30 or 40 years ago more useful than current financials with more disclosures. Some derivative assets have suspect values, an 'asset' Munger refers to as "good until reached for".

4:19:45 Salomon Plug

There was a $180mn "floating plug" in Salomon's financials (on $4bn of assets) to balance the balance sheet for 10 years, which is amusing. Also interesting that Buffett blames the auditors Arthur Andersen for not figuring it out when it's Salomon's responsibility. :-)


Until next week, Cheers!


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