How to generate extreme returns (Part 2) – The market exists to serve, not to guide.

In ground rules, I stated that “Your manager seeks to avoid permanent losses, but not quotational losses. A security can trade at any price, hence price volatility can never be avoided.” That a security can trade at any price should be both seductive and intimidating. The stock bought at $10 yesterday can trade at multiples … Continue reading How to generate extreme returns (Part 2) – The market exists to serve, not to guide.

How to generate extreme returns (Part 1) – an introduction

First published on 2/29/20. Revised on 4/11/20. My goal as an active investor is to out-perform standard stock indices by a large margin over an extended period. A standard stock index is a formidable opponent, as the vast majority of active investors would attest. Most generate returns insufficient to beat a passive investment in a … Continue reading How to generate extreme returns (Part 1) – an introduction

Get hooked to this maker of tobacco alternatives (77% upside)

Turning Point Brands (NYSE: TPB) is a manufacturer and marketer of OTP (Other Tobacco Products) and hemp-derived CBD products. Attractive product economics, in the form of non-cyclical demand and strong brand loyalty, support pricing power, consistent margins and cash flows, and high returns on capital (~40% gross margin, ~10% FCF margin, 20% ROIC). TPB stock … Continue reading Get hooked to this maker of tobacco alternatives (77% upside)