Newsletter - October 7th, 2024

AuditorInvestor

Oct 7, 20242 min read

Dear Reader,

Attached is a recent list of stocks that passed value screens (e.g. low earnings multiple, below tangible equity, 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:

Join Here

Terry Smith - Career

Some notes from a recent Terry Smith interview below:

7:45 Nigeria cement scam

Smith recalls wise advice from his banking boss: Avoid taking on doubtful customers or unnecessary risk.

In investing, if you truly fear for the future of a company, avoid it. There are no "called strikes" as Buffett says - you don't have to invest until it's in your sweet spot.

18:45 Profit guidance

Managements can't always predict future performance. It's the analyst's job to reasonably assess the future of a business.

Ben Graham taught that analysis must be "penetrating rather than prophetic", to "guard against future changes", and most importantly to allow for a "liberal margin of safety in case of error or disappointment". (We seek this quantitative margin of safety in every investment we report on.)

33:30 Late news

The Templeton fund was located in the Bahamas, and received the Wall Street Journal a day late. This was beneficial for them as it was too late to panic on bad news, and allowed for more rational exploitation of prices. Less news stimulation is generally conducive to better investment performance.

34:00 Day trading

Day trading (or predicting short-term price changes) is similar to punting at the casino. The odds are against you - you'll eventually give back all your gains, and then some (if trading on margin).

Such speculation may not be illegal or immoral - but it's not financially fattening either.

35:30 Competitive advantages

Smith talks about the types of companies he owns: they generally have a lock on their markets (Visa with payment systems, Meta with online advertising, etc.), or an installed base of equipment with annual maintenance contracts (elevators and escalators).

39:30 Advantages of small size

As small investors, your opportunity set is exponentially larger than Fundsmith or similar large funds - take advantage of this by joining below, and exploring the numerous bargains among smaller stocks .

For reports on the best investment values in stocks worldwide:

Join Here

Wish you an excellent week ahead.

Newsletter - October 7th, 2024

Dear Reader,

Attached is a recent list of stocks that passed value screens (e.g. low earnings multiple, below tangible equity, 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:

Terry Smith - Career

Some notes from a recent Terry Smith interview below:

7:45 Nigeria cement scam

Smith recalls wise advice from his banking boss: Avoid taking on doubtful customers or unnecessary risk.

In investing, if you truly fear for the future of a company, avoid it. There are no "called strikes" as Buffett says - you don't have to invest until it's in your sweet spot.

18:45 Profit guidance

Managements can't always predict future performance. It's the analyst's job to reasonably assess the future of a business.

Ben Graham taught that analysis must be "penetrating rather than prophetic", to "guard against future changes", and most importantly to allow for a "liberal margin of safety in case of error or disappointment". (We seek this quantitative margin of safety in every investment we report on.)

33:30 Late news

The Templeton fund was located in the Bahamas, and received the Wall Street Journal a day late. This was beneficial for them as it was too late to panic on bad news, and allowed for more rational exploitation of prices. Less news stimulation is generally conducive to better investment performance.

34:00 Day trading

Day trading (or predicting short-term price changes) is similar to punting at the casino. The odds are against you - you'll eventually give back all your gains, and then some (if trading on margin).

Such speculation may not be illegal or immoral - but it's not financially fattening either.

35:30 Competitive advantages

Smith talks about the types of companies he owns: they generally have a lock on their markets (Visa with payment systems, Meta with online advertising, etc.), or an installed base of equipment with annual maintenance contracts (elevators and escalators).

39:30 Advantages of small size

As small investors, your opportunity set is exponentially larger than Fundsmith or similar large funds - take advantage of this by joining below, and exploring the numerous bargains among smaller stocks .

For reports on the best investment values in stocks worldwide:

Wish you an excellent week ahead.

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