October 04, 2024 | | Weekly Recap Burry's Playbook, Estée Lauder's Recovery, Timeless Investing Wisdom, and Advance Auto Parts' Path to Profitability |
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| We put your money to work | | Betterment's financial experts and automated investing technology are working behind the scenes to make your money hustle while you do whatever you want. | Learn more | | Dear Intelligent Investor, | Thanks for subscribing to our free daily e-letter! If you're new to our list, welcome aboard! We always appreciate feedback—feel free to send us a note anytime. | In case you missed any of this week's issues, you can catch up on them below. Or hit save on this email to get caught up over the weekend. | Monday, September 30 | Michael Burry's Value Investing Playbook Still Works 25 Years Later | We shared insights from a one-pager Michael Burry wrote in 2000, which still reads like a modern playbook for value investors. Burry emphasizes buying unpopular stocks with a margin of safety, focusing on enterprise value/EBITDA over traditional metrics like P/E, and cutting losses quickly. His strategy remains highly relevant today. We highlighted his portfolio, which is concentrated in beaten-down Chinese tech stocks such as Alibaba (BABA), Baidu (BIDU), and JD.com (JD). | Tuesday, October 1 (Premium) | Is Estée Lauder (EL) a Turnaround Play? | Estée Lauder stock is down nearly 75% from its peak, despite bouncing back due to recent news of China's new stimulus package. We dove into the company's shrinking margins and challenges in Asia. The company has launched a "Profit Growth and Recovery Plan" to regain profitability by 2026. While the stock trades at a high P/E ratio, it could be an opportunity for a successful turnaround. Analysts' fair value estimates range from $120 to $175. We examined whether this could be a good long-term play for patient value investors. | Wednesday, October 2 | Lessons from the Greatest Investors: Timeless Wisdom from Buffett, Munger, Lynch, and More | We covered the timeless investing wisdom of greats like Warren Buffett, Charlie Munger, and Peter Lynch. From "Price is what you pay, value is what you get" to "Be fearful when others are greedy," these lessons are the real roadmap to intelligent investing. Doing a discounted cash flow is easy. Buying into the next financial panic is hard. We also discussed how to avoid common mistakes, manage risk, and invest for the long term with patience and discipline. | Thursday, October 3 (Premium) | Advance Auto Parts: Loeb's Influence and the Road Ahead | Advance Auto Parts is down 85% from its peak on margin pressure, but it's beginning to see improvement in the latest quarter. With Dan Loeb's Third Point gaining influence over the board and a $1.5 billion asset sale in progress, CEO Shane O'Kelly has outlined a strategy to return the company to profitability. We analyzed the potential for a turnaround over the next three to five years, with a possible 3.2x gain if the plan works. However, the risks remain high, with skilled competitors like AutoZone and O'Reilly Auto Parts in the space. Finally, we discussed various risk management strategies for portfolio inclusion. | Happy Investing, Value Investor Daily Team | P.S. As you may have noticed, our Tuesday and Thursday issues were premium content. If you haven't already, consider signing up for our premium subscription to unlock these in-depth analyses. Sign up for a 30-day free trial to access them and see if it's right for you! | | We put your money to work | | Betterment's financial experts and automated investing technology are working behind the scenes to make your money hustle while you do whatever you want. | Learn more |
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