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Newsletter - January 26th, 2025

AuditorInvestor

Jan 252 min read

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:

Macro Research - Jason Trennert, Strategas

Trennert is best known for applying the 'TINA' (there is no alternative) term to stocks in the 2013-2022 period of low interest rates. Notes from a recent interview below:

3:00 Gold price rise

The rise of gold prices (alongside stocks) indicates that the fight against inflation may not be over. There's a real possibility that US inflation could get out of control with tariffs - among other factors.

6:30 Market valuations

The 'magnificent seven' must be separated from the rest for proper analysis. The rest of the market doesn't look quite as expensive, and the magnificent seven has demonstrated impressive growth.

However, when there's underlying upward pressure on interest rates, earnings multiples may not expand as rapidly as the last two years.

10:30 European stocks

Trennert suggests that European stocks aren't worth buying unless they adopt US-style deregulation.

We think that certain stocks (even of mediocre businesses) are priced so low that they'd qualify as investment purchases - covered in our reports.

14:45 Electricity demand

One AI search consumes 10x the electricity of a Google search. EVs, crypto mining, etc. adds to demand.

Companies that produce natural gas, nuclear energy, modernize the electricity grid, etc. may have strong tailwinds over time.

18:30 Earnings haven't caught up

The S&P 500 has accelerated so rapidly versus earnings growth in the last two years that there are decent chances of lower performance till earnings catch up.

To access the best investment bargains worldwide:

Have a great week!

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