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Please Note: These are not buy or sell recommendations, as you know, I believe in the old proverb ‘give a person a fish a day and you feed them for a day, but teach them how to fish you feed them for a lifetime.‘
And you will not receive a weekly list, I will only inform you of stocks that show real potential and that happens only occasionally.
As Howard Marks wrote in his Oaktree memo;
“The bottom line is that first-level thinkers see what’s on the surface, react to it simplistically, and buy or sell on the basis of their reactions.
They don’t understand their setting as a marketplace where asset prices reflect and depend on the expectations of the participants. They ignore the part that others play in how prices change And they fail to understand the implications of all this for the route to success.
The first-lever thinker simply looks for the highest-quality company, the best product, the fastest earnings growth or the lowest p/e ratio. He’s ignorant of the very existence of a second level at which to think, and of the need to pursue it.
Remember your goal in investing isn’t to earn average returns; you want to do better than average.
Thus your thinking has to be better than that of others – but more powerful and at a higher level.
Since others may be smart, well-informed and highly computerized, you must find an edge they don’t have.
You must think of something they haven’t thought of, see things they miss, or bring insight they don’t possess.
You have to react differently and behave differently.
In short, being right may be necessary condition for investment success, but it won’t be sufficient. You must be more right than others…Which by definition means your thinking has to be different..
For your performance to diverge from the norm, your expectations-and thus your portfolio-have to diverge from the norm, and you have to be more right than the consensus. Different and better: that’s a pretty good description of second-level thinking.”
Don’t treat the weekly list of stocks as a first lever thinker, but as a thoughtful second-level thinker.
Stock promoters target first level thinkers, and they make millions per year off them – under the guise of education.
Dividend, Growth & Value Stocks
Please note you will not receive a weekly list, I will only inform you of stocks that show real potential and that happens only occasionally.
A true story.
A friend called me in excitement ‘Adam Adam Adam, you won’t believe it!, ‘What is it? I asked,
‘You know those stocks that turned up in our search result last Friday? There the same stocks Stock Promoter X is selling!’
‘Really! but how do you know this?’ I said and he replied that he had joined their membership because he thought they know something he didn’t, but it turns out we all were looking at the same stocks.
That was a conversion I had with a friend of mine at university, a few years ago.
We were at the time lacking confidence in our own ability to select stocks, that was why we were surprised to learn that a self described stock picking genius – no real genius ever calls themselves a genius – were selling the same set of stocks we had discovered ourselves.
According to Steven Vines, author of the book Market Panic, when a person presents stock related information as secret, as inside information, as confidential, or as time critical, we are more likely to believe that he person knows something we don’t.
We love the idea of insider information, as we believe that it gives us an edge over others.
I’ve learnt from experience that you have to ignore them, otherwise you’ll doubt yourself, they’re good at selling hyperbole.
I believe you can find great stocks, I did and I’m no genius, but also keep in mind that popular ‘hot stocks’ probably are to be avoided, it is the boring, ugly, and out of favor stocks that have in the past delivered great returns for investors who are patient.
I use [the] Two Minute Formula to decide if a stock is a potential 10-100 multibagger or not in under 2 minutes. You can use it yourself, check it out here.