Newsletter - September 22nd, 2024

Dear Reader,

Attached is a recent list of stocks that passed value screens (e.g. below net current asset value, 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:

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Wealthtrack - James Grant

Author of Grant's Interest Rate Observer - an experienced and reputed investment writer:

2:45 Future is a closed book

Don't mistake convictions for facts. Live with humility.

In practical terms, seek a margin of safety in every investment - and diversify.

We seek this safety margin in every stock report we publish - and identify several such stocks to make up a diversified portfolio.

4:00/14:00 Market trends can go on for a long time

The market can move against you (or for you) for a long period of time. This may be the case with the Magnificent Seven technology stocks, which has been driving the S&P 500's performance recently.

Investors are better off psychologically accepting this - and retaining their focus on the operating performance, and asset values of their businesses.

12:30 How can buying cheap be out of favor?

Investors ought to want their stocks to go way down in price - that's when they can top up to obtain better investment values.

If an investor can live off his dividends (or has other income to cover his expenses), this ought to be his attitude towards stocks.

Buying stocks cheaply is so logical, it can't go out of favor for good. Undervalued stocks can't stay cheap indefinitely.

15:45 Private Credit

Private credit and similar private investments were in favor because they weren't marked to market as frequently as public stocks, and therefore, the investment managers were spared from answering for adverse volatility measures - the power of incentives.

Individual investors have the luxury of disregarding market volatility. Instead, they can exploit this to their advantage.

19:00 Adaptability

The best investors learn the timeless principles from past masters, and apply it to present conditions.

Buying businesses considerably below their value need not be limited to fixed formulas - this adaptability comes with learning and experience.

23:15 Exposure to compounding

Investors ought to have exposure to human ingenuity and material progress via stocks. As expounded in this newsletter before, stocks also provide exposure to automatic reinvestment (and compounding) while throwing off dividends.

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For reports on the best investment values in stocks worldwide:

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Wish you an excellent week ahead.