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December 09, 2013


Have I got a story for you.  A friend of mine has written the most unusual book you will read this year--or will read maybe ever.  It's really more of an adventure than a book. Let me explain. 

I'm guessing that at some point when you were growing up, there was some point in time when you were pretty down. It was then that your mom probably said something like:  "No matter how bad you feel right now, someone's had it worse."  At other times when you felt on top of the world, someone might have warned you: "No matter how  well you do, someone else has done it better."

We've all heard that sort of thing. Here's the really unusual part: What if the highest highs and the lowest lows actually happened to the same person?  My friend, Bill Bartmann, is living that life and its a great story. Get this:

• As a teenager, he was a homeless gang member, eating out of dumpsters.

• Later, his best job was working at a pig slaughterhouse.

• He was an alcoholic at age 18, and became a paraplegic after falling down stairs drunk

• Yet he walked out of the hospital...

• Got married (and stayed married)

• And put himself through college... and law school.

• And became an entrepreneur in the oil patch, a millionaire and then lost it all

• And with about 2 cents started a new business ...

• And Bill became a billionaire and entrepreneur of the year

• Then the Feds (nice job John Ashcroft) moved in on him for all the wrong reasons, destroyed his company and he lost it all in 72 hours and faced 600 years of jail ...

• But he refused to plea bargain and was found not guilty....

• And now he's on the road to getting it all back.

If you've ever wished that fiction thrillers were more true, and that true stories were more interesting, then you're gonna love this book; "Bouncing Back" by Bill Bartmann.

Full Disclosure: I don't make a single penny if you buy this book. I just want you to know about Bill's amazing book for three reasons:
1. It's just a fascinating story to read and to realize that it all happened to a real person who's alive today; and
2. It's full of important principles about failure and success, betrayal and honor, despair and resolve.

3.  I couldn't put it down. 

You know I get asked to blurb books all the time.  Among authors its almost a tribal requirement to blurb other's books.  But I rarely do it and only when I really like the book and I really like the author and I think you guys will benefit from it in some immediate way.  I've blurbed Happy for No Reason by Marci Shimoff, 4-Hr Workweek by Tim Ferriss and now this one.

You can get the eBook at Amazon.  "Bouncing Back".  It's only $5.95 on Kindle. Here's a link to the book or go to and type in "Bouncing Back by Bill Bartmann".

I can tell you one thing for sure: If you start reading this book, you will not be able to resist telling others about it. It's one hell of a story.

Now go play

November 26, 2013


This post is a virtual interview with Mr. Warren Buffett that I created by framing questions to match answers from his annual letters.  Its not a long interview so I strongly urge you to read each answer closely.  Really give it an effort to understand what he's saying.  This is distilled investing knowledge of a lifetime.  It wouldn't hurt to memorize it:


Q.  Mr. Buffett, you’ve taught us to look for a good business at a good price.  Could you give us an example of a good business that all of our Rule One students can easily understand?

A.  They ought to be confident if they buy a farm....  [T]hey ought to look at what the farm produces, how many bushels an acre do they get out of their corn or soybeans and what prices do they bring.  If you decide to buy a farm and you pay the right price for it, you don’t need to lose faith in American agriculture, you know, because the prices of farms go down.


Q.  So you don’t worry at all about being able to buy this farm or business cheaper tomorrow.  What if the economy and stock market are melting down?  Do you still step in there and buy?

A.  If you tell me the economy is going to be terrible for 12 months, pick a number, and then if I find something that is attractive today, I am going to buy it today.  I am not going to wait and hope that it sells cheaper six months from now.  Because who knows when stocks will hit a low or a high?  Nobody knows that.  All you know is whether you’re getting enough for your money or not.


Q.  So what are the key things you look for to determine whether you are getting enough for your money?

A.  If you’re going to buy a stock in some business that’s been around for a 100 years and will be around for 100 more years and it’s not a leveraged company and it sells some important product and it’s got a strong competitive position and you buy it at a reasonable multiple of earnings, you don’t have to worry about crooks, you’re going to do fine.


Q.  What’s your view of a ‘reasonable’ multiple of earnings?  Is there a number?

A.  We acquired a company recently and the owner quoted me as saying that I like to buy a PE of 10.  I’ll leave it at that.


Q.  We’re not supposed to worry about the business’s market price declining, right?  Is there a percentage decline beyond which you’d be very concerned?

A.  Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.


Q.  That brings up the question of diversification.  You are famously not diversified across the broad market.  Why is that better than spreading it around to a lot of good companies?

A. Wide diversification is only required when investors do not understand what they are doing.  Never invest in a business you cannot understand.  Risk can be greatly reduced by concentrating on only a few holdings in businesses you understand well. 


Q.  Which takes us to my last question:  What’s the most critical thing for our Rule One students to focus on? 

A.  The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price.  [And] lethargy bordering on sloth should remain the cornerstone of [their] investment style.


Q.  Thank you very much, Mr. Buffett.  Everything makes total sense.  Its so weird so few people follow these principles.  I always wondered why.

A.  I asked [Ben]Graham the same question. Everyone took his class at Columbia Business School. 90% of the people that took his class ended up doing something else.


Now go play.

November 11, 2013


I am putting up the following post as a training exercise.  I am not giving you my opinion on the quality of the analysis except to tell Angela that she's definitely trying to do the work and that's the most important thing at this point.  The more you do on your own, the faster you learn.  So let's take a good look at what she wrote and do some solid critiques.  Focus on MOAT and the value of the business.  Is this a 'Just One'?  Would you put even 25% of your money into this?  If not, why are we looking at it?  If so, then make a good, rational case for it.  

And have fun!


Angela W. 

Silver Wheaton


I. Meaning: Silver Wheaton (SLW) is the world’s largest silver streaming company. It does not own or operate any mines. By providing upfront payment, it secures long time/lifetime agreements to buy all or portion of silver and gold production at a predetermined fixed cost, generally around $4/oz and $400/oz respectively, from mining companies located in politically stable regions around the world. Streaming companies provide venture capital for mining companies in exchange for an interest in mine production. Streaming is considered to be mutually beneficial. In today’s environment where funding is hard/expensive to obtain and the fact that mining is a very capital intensive business, mining companies could get upfront capital injection at no/very low cost, from their non-core by- product sale, to fund their core product business. SLW’s peers include Royal Gold (RGLD), Franco-Nevada (FNV) and Sandstorm (SAND), primarily gold streaming companies versus SLW a primarily silver streaming player (80% silver +20% gold). SLW has streaming rights to 19 operating mines and 4 development projects. Corner stone assets including Penasquito mine in Mexico with Gold Corp, Pacua-Lama project in Chile/Argentine with Barrick Gold, San Dimas mine in Mexico with Primero, Constancia silver/gold mines in Peru with Hudbay,777 gold mine in Canada with Hudbay and the recent acquisition of Salobo/Sudbury gold mine in Brazil with Vale. Durability and Predictability • Durable mining industry as economic growth demands metals. Thomson Reuters GFMS estimates that 72% of 2012 global silver production was produced as a by-product from copper, lead, zinc or gold mines. As a result, silver will be mined anyway together with other metals. In addition to being an investment vehicle, silver (50% of its production) has been widely used for industrial use, primarily in hi-tech sector, such as in cell phones/electronics/equipment. o SLW owns estimated reserves of 1.12B silver equivalent oz. At 33.5M silver equivalent oz production per year pace, the existing reserve could last them 25-30 years, without counting future acquisitions. In addition, SLW now has only 5.8% of the world’s total silver production, thus still has considerable amount of growth potential. •Predictability o Very low. Precious metals are very price volatile, and there is inherent exploration/development risk associated with the projects SLW has a meaning for me. With concerns of central banks creating fiat money and eventual high inflation/wealth transfer, I have invested in both physical bullions and ETFs in my retirement account. I have followed commodity veterans Jim Sinclair, Jim Rogers, Doug Casey, David Morgan since 2002. I see SLW as a unique business model as it has a more diversified portfolio than regular mining companies, no risk with direct exploration/development/production, fixed capital and purchase cost, and a potential to capture price upside.


II. Moat: Numbers look good, consistent and growing Moat: Compound Growth Rate 10 Years 7 Years 5 Years 3 Years 1 Year RATING BVPS+Dividend Growth Rate - 30.5% 21.5% 22.7% 20.9% 100 EPS Growth - 41.0% 32.3% 62.1% 6.4% 100 OCPS Growth - 43.8% 30.8% 61.7% 14.7% 100 Sales Growth - 28.3% 24.9% 45.4% 15.9% 100 Rule One Moat Score 100 • Switching moat: SLW, through its streaming agreement, owns, in most cases, lifetime silver/gold production from its mining partners. • Why they are better than competitors: SLW believes they have redefined how mining industry use their non-core silver byproduct. SLW has the first mover advantage, and have quickly amassed consideration amount of funding in the beginning, and later on solid cash flows from operations. The cash on hand helps to position them in a unique time like now • Chart View: all 4 lines are in a consistent and parallel upward trend, except for EPS growth dip in 2008, due to $65M loss on mark-to-market long term investment, which looks like the company’s warrants. • Gurufocus: no Phil’s gurus activity


III. Management Management: Average Growth Rates 10 Years 7 Years 5 Years 3 Years 1 Year RATING ROE - 12.3% 12.2% 17.5% 18.9% 100 ROIC - 11.4% 11.7% 17.2% 18.7% 100 Debt 0.04 years earnings 99 Rule One Management Score 99 • A very capital efficient business model/management team. 28 full time employees, with $7.5B market cap and $845M 2012 revenue. • CEO/President Randy Smallwood is one of SLW’s founding members. He is an industry veteran, with a geological engineering background and has been in a number of mining companies, including Gold Corp. He has mainly been in corporate development role, basically a deal maker. • Management team performance is solid. They have in depth knowledge of the mining industry. They target mining companies based on these criteria. • Low leveraged balance sheet: companies need to have the extra cash to sit out the tough times. Gold Corp as an example. • Low cost, high efficiency: 85% of SLW production comes from the companies in the low quartile of their cost curves • Junior mining companies that need alternative ways of funding and are willing to make deals. Hudbay/Vale as example. They have also been smart to put contingency clauses in the contract to protect their interest, in case the deal goes sour. Concerns: • Haytham Hodaly, Senior Vice President, Corporate Development, joined SLW in 2012. Before, he is a mining analyst in RBC capital and has 16+ years of experience in North America security market. Not sure how effective he is, as a long time security analyst, to be a deal maker in the real world. • CEO’s 2011 compensation of $2.9M, with only 23% in salary, the rest from restricted stocks/options. Gives incentive to drive for short/mid term stock performance. From Insider Trading, he got 150K stock options exercised at $17/share on the most recent June and sold half of it on the same day for $24. See other management team mostly sell, instead of buying company stocks • Don’t see personally passionate BAG


Evaluation Pros: • Predictable upfront cost, fixed purchase cost • High margin with GM>50%. SLW pays around $4/oz and $400/oz for silver and gold respectively. As a reference, Gold Corp’s all-in cost is $874/oz and Barrick $945/oz of gold production. • Do not have to deal with exploration/development/environmental risks


Cons: • no control over operation/production • Mining partners might go underwater and thus goes the upfront investment and future growth • Extremely volatile PM prices • Declining margin/earnings this year due to lower metal price and higher cost resulting from product mix (more gold into the mix, with lower margin)


SLW future growth depends on two factors: production volume and metal prices. Production Volume: SLW management comments that they have been extremely busy with corporate development projects. They are treading very carefully during volatile time, looking for “green flag’ among the red. Additional acquisitions is highly likely. Randy and his team is almost like our Ruler, looking for events to happen so that they could capitalize Price: Jim Rogers/Doug Casey think gold/silver price will go up in the long run. Jim says that there will probably be more corrections in near term, but “gold price should go up much higher in the next decade”. Mainly due to central banks’ money printing Events


• Mining sector: The traditionally European financiers have backed away from the mining sector, due to increased mining cost, cash flow being eaten by increased capital investment, the availability of ETFs and the general economy. The mining sector has been hammered in the last several years and it has become very difficult and expensive, especially for junior miners to find funding. However, great opportunity for SLW


• SLW: Barrick announced construction suspension of Pascua-Lama mine on Oct 31 and its CEO is forced to step down 11/8. Major setback for SLW as the mine is projected to be 15-20% of its total sales by 2017. However, I think this is temporary. Pascua-Lama is a $8.5B capital investment project and once finished, is said to be the world’s best silver mine with the most deposits and low cost. Under grave cost concern, this project is probably being put on care & maintenance and Barrick is waiting to resolve high cost issue, environmental issues but impossible to walk away from a good mine. There will be delay in project completion but not eventual shut down. Meanwhile, SLW is entitled to get the short fall volume from Barrick’s 3 other mines and could get back its upfront $625M investment if project goes sour. SLW is protected from the downside, however, the temporary impact to upside growth in near term is real.


IV. Margin of Safety • Growth rate: Analyst projection 20%. Based on SLW’s recent updated forecast, annual compound production growth rate to 2017 will be 6.1%. I did two scenarios, assuming 10% production growth (with additional acquisitions) afterward with and without Pascua-Lama reopening in 2018. Price wise, assuming price will double in the next decade to $40/oz. The projected growth rate comes out about 15% • TTM: $1.29 (updated after Q3 13 earnings). I feel the margin erosion from increased gold weight has been almost counted in now. • P/E: 30 • Sticker $38, MOS $19. • Analyst long term P/E 20, then MOS $13 • Seems price is in a channel, with $24 high and $15 low. Option candidate? 1 month put with $15 and $17 strike yield $.3 to $.11 per. • Current observation: Does not fit into “Just One” category but might be a candidate for 2nd tier positions. How about buy 1H at $18 and sell puts around $16 strike

November 06, 2013


There has been a flurry of comments discussing PE and Rule #1 and a lot of questions have arisen that have been answered with various degrees of accuracy regarding how we use PE.

Many so-called 'value' investors try to buy companies based on low PE's and high PE's.  The idea is that if today the PE is a 5 and a 5 PE is at the low end of the relative range of the business's PE, the business is a 'value' and is on sale.  That's not a Rule #1 Investing principle nor is it even necessarily correct.  

A company is not necessarily 'on-sale' by virtue of its PE being relatively low.  The relative PE provides no information about what earnings are going to be in the future, how those fit into the overall historical picture or how the TTM EPS is related to the future earnings of the company.  If you could buy wonderful businesses on sale just by doing a relative PE analysis, you wouldn't need to understand the business at all.  Life would be simple.  But low PE's can be deceptive.

A company can have a relatively high PE if Mr. Market thinks the TTM EPS is unrealistically low.  Or a relatively low PE if Mr. Market thinks the earnings are unusually high.  

And if the business is on its way to bankruptcy or a long recovery or a broken moat you could be looking at a relatively low PE and no kind of margin of safety at all.

You gotta know the business.  You gotta know the moat.  You gotta know the absolute value, not the relative value.

The only place we use PE is as a multiple of the earnings in our Rule #1 MOS valuation formula. While that might seem like a distinction without a difference at first look, its a very different use of PE than relative valuation use.  We are not determining whether the business is on sale based on a relative view of what 'low' is with regard to this company.  I use it solely as one of four inputs into the MOS analysis.  It is just a multiple of the future earnings and its necessary because no good company is going to sell for one year of earnings. Its going to sell for multiple years worth of earnings.  The right multiple reflects a good market and a solid grip on the long-term growth rate ten years into the future.  For Rule #1 investors the PE is derived more from a projection of future growth than historical PE data.

Note that we don't use the PE to figure Payback Time.  We don't use PE in figuring Zombie value. And, to reiterate, we don't use relative PE to decide something is 'cheap'.  

[NOTE: A brief reminder to those of you who are taking advanced courses that this is not the place to discuss the content of those programs nor are you authorized to discuss intellectual property publicly.  That information is for you to use, not for you to teach.  Thank you.]

Now go play.

October 29, 2013


The auditorium at the Wyndham was packed; standing room only for 3 days.  Our sincere thanks to Michelle, Jeff, JP, Earl and Nancy, Michael D, Greg and Kirk for all of their help and also a big thanks to all the many long-time students who volunteered to help the novice Rulers during the small-group lab sessions.  And a very special "thank you" to Stephen Haller who joined us from Germany with his amazing insights (for staff) into economics.  

We're already looking forward to the next time we can do this with those who've never had a chance or the money to learn how to invest the way the best investors in the world do it. 

Here's a summary of the three days:

The key to successful investing is to buy companies (stocks) as if each one is the only stock you will buy the rest of your life. 

You must buy only 5 to 10 companies.  To get great results, you must load up, not nibble.

You must truly understand the business and the industry in order to 'load up the truck' when you have the opportunity.

The historical view of the business is only the first step.  Knowing where its going in the future is what's critical and what its worth as a business.

How to know the value 3 different ways: MOS, Payback Time and Zombie.

Why you must have a huge margin of safety when you buy and how to know if you really have one.

Why your mutual fund manager can not and will not invest like Warren Buffett with a MOS and a focus on only a few great companies that are on sale.

Why its critical to calculate Owner's Cash to nail the true PBT.

Why coat-tailing is the easiest and best way to find stocks to research.

The best hedge fund managers to coat-tail and why 'shorting' stocks creates a problem for coat-tailers.

What 'shorting' means.

Portfolio management: How much stock to buy and how often to buy it.

Why its critical to hope the stock goes down after you buy it and how (and why) you'll profit more if it does.

How to use specific free websites for analysis, back-testing, charting and derivatives analysis.

What's a short put and what's a short call.

Rule One Puts (ROPs) and Rule One Calls (ROCs) and why, how and when to use them.

STO-BTC, BTO-STC: Combinations to correctly enter and exit ROPs and ROCs.

How to know which price to choose, bid or ask, for any option trade.

Why basis reduction is the key to a great portfolio

How basis reduction creates amazingly high 'equity bond' yields from dividends

Support and resistance, floors and ceilings

Key indicators for market-wide projections

Bringing it all together: How to repeatedly write/short/sell specific derivatives to reduce basis on your 'just one' company, particularly when the stock price is dropping like a brick...and how that can reduce basis by as much as 80% in a year.

How to use rule #1 basis reduction tactics to remove market risk, inflation risk and deflation risk virtually forever.

How to hedge a ROP to get more capital working with good leverage than otherwise possible in a small account.


Now go play.


October 06, 2013


One of our most conscientious commenters, Shuki, has raised some issues around the ideas of Stockpiling and selling puts to enter positions so I thought I’d try to clarify my point of view here for y’all.


To understand the concept of Stockpiling you only have to remember that Mr. Market doesn’t put things on sale for no reason.  There is almost always a reason that a wonderful business is on sale.  I call that reason an ‘Event’.  Events can be specific to a company or an industry.  The Macondo well disaster drove down prices on BP and Noble. Gildan got hammered when cotton prices doubled during the Arab Spring.  Cameco saw its stock price get halved after Fukushima.  Events are cool because its pretty easy to see why Mr. Market is dumping the stock.  If I don’t know why, I usually feel there is something going on I should know but don’t so buying even at what seems to be a really low price usually seems too risky for me simply because I know Mr. Market isn’t stupid.  If Mr. Market is getting out of the stock because who knows if the company will recover in a year or maybe 3 years, or because the CEO said he’s going to have a really bad year, or because the industry is going to be down for a couple of years and if my time horizon for the stock to recover is longer than the period Mr. Market fears, then I can be a buyer while really smart guys are selling.  The only problem is, I don’t know how long they are going to be selling or how far down this price will go.  Which brings us to stockpiling.


I come by Stockpiling honestly.  Its in the Rule #1 tradition.  Buffett is an inveterate Stockpiler.  He has to be now because it’s nearly impossible for him to take a full position in a company all at once.  He’s just too big.  He started Stockpiling BNI in 2007 and finished in late 2009.  He started Stockpiling IBM in 2011 and was still buying in 2013.  But he’s always been like that.  Here’s a quote from his 1958 partnership letter about Stockpiling (my term for it) into a small bank:


“So that you may better understand our method of operation, I think it would be well to review a specific activity of 1958.  Last year I referred to our largest holding which comprised 10% to 20% of the assets of the various partnerships.  I pointed out that it was to our interest to have this stock decline or remain relatively steady, so that we could acquire an even larger position....  Over a period of a year or so, we were successful in obtaining about 12% of the bank at a price averaging about $51 per share....” (


Shuki prefers to buy her whole position as soon as the stock reaches an attractive price and there is nothing wrong with that point of view.  Small investors can get away with it.  But it is also not wrong for a small investor to Stockpile into a position, particularly if the price seems bent on continuing on down.  Our most recent experience with this was with CCJ: I began acquiring it at $28 after it dropped from $44 and I continued to Stockpile it down to $18.  Which brings me to using puts.


The main reason we sell OTM puts is to either reduce our basis or increase our position or both.  I do it because its often free money and I’m often small enough to get away with it.  Buffett also does this on occasion when the opportunity arises as he has recently with both Coke and BNI but at his level the options market is small potatoes on most stocks he is trying to acquire. 


Even at my level, I can easily move the premium prices on many stocks I want to acquire by taking too large a position on a specific strike price and expiration.  In general, though, on large stocks like CF or IBM, I can effectively use options to get another tranche at a great price or lower the basis of the tranche I already own with virtually no extra risk over buying another tranche. 


I recently took a position in CF Industries (CF) at about $190 and lowered the basis by selling way out of the money LEAPS puts down into the $160s that I can now buy back cheaply to lock in the reduced basis.  I mention this as an example but its not unique.  I did the same thing with Gildan, BP, CCJ, Noble, Coke, Walmart, Coach, Western Union and Oaktree in the last couple of years.  The main idea here is to take advantage of the increase in Implied Volatility created by the uncertainty of the outcome of the ‘Event’ to increase the premium of puts that have strike prices so low I’d be jumping for joy to own the business at that price. 


In effect, the only downside of selling the puts instead of buying another tranche or two is not getting more of the business but done judiciously I can have my cake and eat it, too.  I can buy all of the business I want right now with the expectation that I’ll be in position to buy more in a year when the puts expire.  Of course, I have to be willing to overload that company in my portfolio if I get it put to me at that great price right away.  Like Buffett, I’m willing to be quite overloaded on one company if the probability of a successful outcome is large and the probability of a loss is quite small.  If that is difficult for you to determine, just buy 10% of your portfolio into what you think are great companies at attractive prices and be done with it.  But you do give up the possibility of being able to drop the basis and thereby reduce your market risk and vastly increase your return on basis.  Imagine buying BP at $27 to $41 yet through judicious use of puts have a basis of $20 with dividends of $2 per share after only 3 years.  Each year from now on the increasing dividends reduce the basis (say from $20 to $18) and, as BP raises the dividend back to $5 over the next few years the dividend yield on basis goes through the roof.  I like to target a dividend yield of 20% cash on basis within 5 to 10 years of ownership with a basis of about 25% of the projected price at that time.  This is pretty much nirvana for investors: low market risk combined with double-digit cash on cash yields.


In addition, another beautiful aspect of Stockpiling and selling puts is that we protect our emotions from ERI (the Emotional Rule of Investing which states that if I buy it it will go down and if I sell it it will go up).  I love to buy something and hope it goes down.  That is so much more fun than buying it and hoping it goes up because no matter what happens its all good.  If it goes down, I get to buy more.  If it stays the same, I get to reduce basis.  If it goes up I get to reduce basis and my ‘marked to market’ profits look lovely for my investors. 



Are there problems with this approach?  Sure.   If I buy too little and it runs up, I should have bought more but my mistakes tend to be not buying enough at some price rather than buying too much at too high a price and feeling later that I should have waited until the stock stopped dropping.  Nailing the bottom, of course, requires a crystal ball.  Buffett started buying BNI at $80, continued buying down into the $50’s and then wrapped it up at $100.  Crystal balls are hard to come by which is why being comfortable about not getting enough of a good thing seems to me to be much preferred emotionally to agonizing about getting too much of a good thing too soon.


But in truth, this discussion is about maximizing profit.  We’re all in agreement that we should focus on not losing money by buying wonderful businesses at attractive prices.


(And lest I forget: CONGRATULATIONS TO THE WINNERS OF THE FREE TICKETS TO THE ATLANTA 'TRANSFORMATIONAL INVESTING' WORKSHOP!!!!!!   We received so many essays that were wonderful and heartfelt.  I'm sorry we couldn't take everyone this time but we'll try to do this again next year.  Thank you to every one of you who participated and to everyone who is coming to the Workshop, I'll see you there!)

Now go play.





September 12, 2013



Last spring we offered our blog readers 3 days with me for free and a bunch of y’all took us up on it ... so many that we had to do two courses and we still had to turn a number of you away for lack of space.  About 500 people showed up between the two courses.  Students came from Brazil, Poland, Israel, Hong Kong, Singapore, Australia, Mexico, Canada and even from Alabama. 

How did it go?  Well, we asked the students who attended to rate the 3-day workshop on one question (we got this simple but profoundly important survey question from Stanford University and Intuit): On a scale of 1 to 10, would you recommend this workshop to your family and friends?

The average score between the two courses for almost 500 people was a 9.3, an almost unheard of positive response to the quality of the training.  To put that in perspective, when Intuit Corporation asked its customers that same question about Quicken, the world’s leading tax and accounting software, they scored a 7.4.

Well, y’all, we’re going to try this again and try to get it perfect this time.  This time we’re going to try to score 10.0.

And why not get a ten?  AAII just published the results of their 'guru' portfolios and Rule #1 in in thrid place for 2013 with an ROI of over 40%.  And we're in the top 8 of 77 screens for the last 3 years and the last 5 years with CAGRs far in excess of the S&P 500.  Here's the screen:


Maybe its time you took 3 days to learn how to do this in your own portfolio.  After all, if you'd just followed this screen for the last five years you would have more than doubled your money with less risk than you're taking by putting your money in a mutual fund or EFT.

We're going to do another special FREE 3-Day course for our most interested, most involved students here on the blog and in our database of readers.  The course will be held near our horse farm south of Atlanta, GA beginning on Friday, October 25th at 9 am through Sunday, October 27th, 2013 at 3 pm.  This is a $4,995 course and it’s going to be the best thing you ever did when it comes to making money and becoming financially independent.


It’s free but it’s only for those of you who haven’t been to the previous two free courses.  We’d love to have you all back again for more but our most important priority is to educate those of you who haven’t yet been to the workshop. 

I’m calling this course the Rule #1 Transformational Investing Course.  And by ‘transformational’, I mean these 3-days will change your whole life.  This course is going to be the best course I’ve ever taught.

To make sure that happens we’re going to keep the course small and intimate so we can teach you well.  We're going to do this for just 100 of you (and your significant other).

You read that right: 100 of y'all are going to be our guests in this 3-day course plus your significant other if you want to bring him/her.  

In this transformational course I'm going to personally teach you about how I pick the right business to own, how I buy the business with a huge discount to its current price and how I use dividends, derivatives and buybacks to get my money out of the business in as fast as 4 years so my market risk is very low and my yield on basis is very high.  What I teach is so unique in the world of investing that no one else in the world teaches anything remotely like it.  This is how the best investors in the world do it, how I do it in my own Rule One Capital hedge fund and we can and will teach you to do it every bit as successfully.

This class is going to be incredible.  I'm leading the course along with my brother, Jeff Town, our Rule #1 faculty and I’m excited to introduce you to a guy who turned his $2000 IRA into millions of dollars using Rule #1 option strategy, Dr. Paul Price.  Paul is a top contributor to and Gurufocus and is now teaching our live-trades class.  If you want to meet Jeff, Paul, Melissa and me along with several of our top students and bloggers, here's your chance.  

Last time we did something to help us all get to know each other even better – we had a barbeque out here at Starting Point Farm – our horse farm south of Atlanta.   We had such a good time getting to know some of you in a social setting that we’re doing another party for y'all. Chicken and pulled pork southern style in a big smoker (and some great veggie burgers for all of us vegetarians).  That’s Saturday night and you won’t want to miss it.  And if you like horses, you might even meet our almost-Olympian, Can’t Fire Me (aka ‘Teddy’), and our national champion (and now preggo) mare, Sienna.  And maybe we can get someone to demo some cross country jumping and a bit of dressage.  (Last time, one of our friends gave us a retreiver demo during the party and our lab, Dewey, fell in love with a very attractive bitch who left him cold and never came back so this time we're using our horses so Dewey won't be hurt again.)

If you haven't done anything like this with us before, ask around the blog and you'll find out we do everything we can to make your experience life changing.  Jeff, Paul, Rule #1 faculty and some of our top students will be doing 1:1 coaching during the course for anyone who is feeling a bit overwhelmed by the pace but don't worry, for those of you who are accepted to the course, I’m going to give you a $995 set of On-Demand Tutorials, also for free, that will take you about 3 hours to go through.  This ‘Intro to Rule #1’ course is the perfect preparation for the 3-Day Transformational Workshop.

Once you’re at the Workshop, here's just a few things you can count on learning:

-How to buy wonderful companies and drive your basis down with derivatives, dividends and buybacks so your market risk goes to zip.

-How to create a 20% cash on basis DIVIDEND annual cash return on your portfolio that grows bigger every year, is inflation-proof and will last your whole life without worrying about it.

-How we create ROP’s and ROSS’s (Rule One Puts and Rule One Short Strangles) to lower market risk and create cash flow.  (And Paul will show you how he used ROP’s and ROSS’s to turn a $2000 IRA into $3,000,000.)

-How a couple of young guys made over $100 million in 5 years using Rule #1 strategy with leverage.

-How a Rule #1 student built a $160 million options trading fund with these basic principles.

... and a whole lot more.  Truth is, if you just learned just one of these things it would make this course worth every cent of the $5000 we normally charge for it.

Now lets talk about how you get to the course.

The course is free if you win.  You invest in getting to Atlanta, your food, your hotel room.   The Wydham gives us a break on the conference room charges if enough of you guys stay there at a discount rate of $129.  Obviously its very convenient to have a room right where we're having the class but as an additinoal incentive to stay there we're going to have a drawing for the 1st 50 essay winners who book rooms at the Wyndham Peachtree Hotel.  If you're in the first 50 who book (but first you have to a winning essay) your name will be placed in a drawing for one month's free access to Phil’s Tues & Thurs night 1 ½ hour live webinars where he opens up one of his own trading accounts for discussion and teaching on which companies he is currently looking at).  We'll pick up the training room, the Internet, instructor's travel/hotels/food/cars, the instructors fees and the barbeque party. Lest you think this is trivial on our part, I'll tell you what it costs us: We estimate it’s going to be near $50,000.

So you gotta be asking yourself why we would we spend $50,000 just to give away a $4,995 course.  Are we altruists?  Do we just love people?  Are we nuts?

Well, if you don't know us yet you'll learn that one of our favorite books is Atlas Shrugged so probably the altruistic motive is out.  And we love you guys but loving y'all's got nothing to do with it.  And no we're not crazy. I'll tell you why we're doing this: Same reason I wrote both books and spent over $1 million on publicity to promote them - we want to change the world we live in and the only way to do it is to change one person at a time (well, 100-200 at a time is okay too).  And we've found that if we show you that what we teach you can learn, many of you will go on to become great Rule #1 students and investors.

Our courses change lives.  That's why we do them.  

Okay so back to you.  What's it going to take to get you to get off your butt and do this?  Are you skeptical and that gives you an excuse to procrastinate your way along in life?  The first time we offered a few free seats we had a concerned father of a young woman calling us to demand to know what the catch was.  He said he was sure we were going to be selling her something at the course.  We said no, we aren't.  Just like last time, there is no selling allowed. Just pure education, as best as we know how to do it.  This dad was very perplexed.  He couldn't think how we were going to take advantage of his daughter but he just knew we were somehow.  We didn’t.  He was amazed.  And she sent all our staff nice gifts afterwards. 

Sometimes free is really free.  Here’s my promise to you: There will not be one single word spoken about selling you anything nor anything sold.  There won’t be a form to fill out.  There won’t be a special 1:1 session to go to.  We just plain don’t do that seminar crap.  We teach.  You learn.  It’s that simple.  You can't buy something at this workshop if you wanted to.

The reason we do that is to earn your trust the hard way - by doing what we say we are going to do.  We have thousands of students who without exception have told us this course is worth every penny of the $4,995 that they paid.  We start teaching at 9 am on Day One and don’t stop until y’all leave on Day Three. Our staff has been known to stay until 2AM in the morning helping students.

So don’t be too concerned about being a bit skeptical but also don't let your inner cynic keep you from an experience of a lifetime and from what virtually all of our students say is a life-changing experience. 

Now, how to win this course.  

Simple enough.  Just write about 200-400 words from your heart.  Maximum 400. Some of you learned last time that we are not going bother trying to teach you how to invest if can't follow simple instructions. Do not write more than 400 words or we will toss your entry into the round-file.  (We let super blogger Garrett get away with breaking the 400 word rule in the first contest and he's been writing 2000 word essays on the blog ever since.) 

What should you write about? Just imagine for a second that you knew you had a $5 million trust fund waiting for you at age 65. What in your life would you have done different?  What would you do different now?

But only 400 words.

And don't worry about the grammar or the way you say it.  Just say it from the heart.  Tell it like we're standing there talking.  All we care about is that you're telling us your dream.

The DEADLINE for all entries is 12:00 midnight EST, SUNDAY, SEPTEMBER 22, 2013.  You've got 12 days. Get to it.  

Here's who wins:  The first 100 good ones win 1 free seat PLUS one seat for your significant other, each one of which is worth $4,995.  When the seats are gone, they're gone. After that you get wait-listed.

SEND YOUR ENTRY TO [email protected]  Be sure to put your full name and your correct contact information on your entry.  We will need to contact you if you are a winner. And keep it under 400 words.


If you win a seat, be ready for 3 incredible days of the best investing training on the planet and should you think I'm exaggerating, ask around on the blog and the people who've been to the previous version of this training will tell you what they think.

By the way, this message is going out to 140,000 people in our database from our books and blog and speaking engagements.  First entries in get first priority with the judges.  First 100 good ones win.  Early counts.

There will be 100 winners and there will be a wait-list.  Some of the winners are likely to not be able to make it to the course so the people on the top of the wait-list will also be notified that they are on the wait-list and that they will be contacted the minute a seat opens up.  And if we can accommodate more than 200, the wait-list group will be the first to be invited in.

If you've already attended the Rule #1 Cash Flow course, either the 3-Day or the CR-280, we’d love to see you again but we are probably not going to have room.  However, since we're making some changes to the old Cash Flow course, we'd love to have you there if we can find the space. You guys are our best students and anything we can do to help you get to this course, we'll do if we can.  You don't need to write anything. Just let us know you want to re-take the course and we’ll let you know on a first-come first-served basis if there is room.  We’ll notify you as quickly as possible after September 23rd.

And if you're a good student and want to come do 1 on 1s during breaks and after each day is over, please let michelle know at [email protected]  We have a lot of volunteers already but we'd like to know who's willing and maybe we'll give you a chance to show us what you can do for others.

Looking forward to hearing from you.

Now Go Play!



August 09, 2013


This post comes as a comment on Mickey's post today:

Mickey ([email protected]) has left you a comment:

Interesting reading.

I agree, Mickey.  Interesting reading from an institutional investor who is sick, SICK! of trying to beat the market by putting 60% of his fund into what he (and the industry) calls 'alternative' investments - things like hedge funds and Private Equity (aka PE).  As he sees it, he has to pick lots of hedge funds because going with just one would be too risky.  And he has to pick lots of PEs.  Same logic.  And he suggests that all this complexity and the lack of transparency and the fees ... oh man the fees can be stunning ... are simply not worth it.  He wants everybody to stop wanting all those high returns, returns above market performance, and just go back to the good old days, to what he calls Simple Investing - meaning his clients should pay him to select a basket of ... not stocks, no ... they should pay him to select a basket of indexes and that would be simple and provide the highest return on investment.

Well, his Simple strategy would be simple for him, that's for sure.  Its not particularly challenging investing to select a pile of index ETFs.  And if you get to collect 1% of $10 billion for the trouble, Simple could look very good indeed.  (For the math challenged amonst us, that's $100,000,000 per year.)

But why is he complaining about hedge funds?  Aren't they worth the extra because they do so well? Well, he thinks that, on the average, hedgies don't actually beat the market.  And he may be right.  The problem with his logic is, however, this: Some hedge funds do beat the market.  By a lot.  And over long, long periods of time.

Ironically for him, the one's that do beat the market tend strongly toward one simple strategy - you guessed it -  Rule #1.  The guys (and they are exclusively guys who are doing this for some reason) who beat, even pound, the market do so by not focusing at all on making money.  They just focus on not losing it.

Strange that that works, but it most certainly does.  Buffett, Graham, Ruane, Perlmeter, Einhorn, Berkowitz, Robertson, Ackman, Pabrai and many more including me, focus on not losing our capital and yet the results come in spectacularly.  Most everybody on this list has a long term track record far above the market average.  

The problem for this and most other institutional fund managers is they want their cake and eat it too.  They want the security blanket that excessive diversification brings and yet they desperately desire the alpha returns achieved by a focused Rule #1 portfolio.  Indeed, it should be obvious that it is impossible to diversity your way into a huge return. The more places the money goes, the less you know about where its going, the more likely a mistake will destroy capital and level the gains down to less than a market level of performance.  Diversification is crack for simple minds; it seems like heaven until they wake up one day and discover everyone left.  All of the investors headed out the door and over to those awful hedge funds.

I feel this guy's pain.  He wants what he can't have - money from lots of investors that he can use to make a mediocre return with.  Simple looks so good until its compared to the market destroying results of Rule #1 investing.  It looks good to be able to tell investors "I told you so" about sticking with the index because the market always goes up in the long run - and here he is - 5 years after the market collapse - with a compounded annual return of 3.7%.  Why isn't everyone applauding?  Because of guys like me.  When can run a simple objective program using my defined strategy and get 20% CAGR in the same 5-year period, most investors are going to prefer that to 3.7%.  $100,000 invested with an index oriented fund increased it to $120,000 while the Rule #1 Strategy at AAII increased it to $250,000.  

Investors used to believe the academics - that you can't beat the market - until even smarter academics proved that you could and that many hedge fund guys did.  From Buffett's famous 24% per year for 50 years to Robertson's 38% per year for 18 years with dozens of audited long-term CAGRs in between, todays investors know its possible and they want it.  They are not willing to leave their money with an institutional manager who wants to go back to Simple and charge fees for it.  They've discovered that they can get Simple even simpler - just go buy DIA, SPY, QQQ and RUT and you're done.  If they want Simple, they learned that they don't need this guy.  Simple is as simple does.  You want the market ROI, its available for a pittance, no management fees required.

But if you're institutional and you want big alpha returns, diversifying across a pile of hedge funds, paying tons of fees and praying you picked the right mix is probably not going to cut it either.  Rule #1 guys are few and far between.  Most hedgies use a lot of leverage and complexity.  Few of them can hold their institutional clients for more than a few months of sub-market returns.  Where the money goes, the industry follows.  If institutional money goes to the guy  with the hottest track record over the last 6 months, more and more hedge funds are going to lever up and go for the big home runs, all the while trying like crazy to avoid having a bad month.  Its a recipe for disaster.

Rule #1 guys don't do that.  They go long.  They buy when their clients are screaming for them to sell.  They don't worry about making alpha.  They do it all backward.  And, in the long run, they kill the market.

Long term killing the market.  That's not what this blog is about.  This blog is about learning to avoid losing your money and that focus results in killing the market.  Everything we do here should be focused on Rule #1, not on short term complexity and high returns, not on options trades, not on gambles.  Let's stick to our knitting, focus on finding great companies at attractive prices and put the complex trades back in pandora's box where they belong.  Like this institutional investor wishes he could, we keep it simple, focus on the basics, avoid the losses and in the end come out a big winner.

Now go play.

July 27, 2013



Some things take time.  One of them is creating a verifiable track record for Rule #1 Investing strategy.  Now we have the data in from the independent research website, aka American Association of Independent Investors, and the news is good.  Or as Zig Ziglar used to say, 'Better than good'. Rule #1 Investing is #6 of 77 for 2013 and #7 of 77 for 2008-2012

After I wrote Rule #1, AAII reached out to get my input on their project to computerize the selection of stocks for their Rule #1 virtual portfolio.


We’ve done rather well.  There are 77 different strategies they follow so the Rule #1 portfolio stands not only on its own results but also in comparison to quite a range of other ‘guru’ strategies.  Not only did the portfolio crush the S&P 500, it crushed the competition as well.  The Rule #1 Investing portfolio is sitting in 6th place out of 77 for 2013 ROI of 25.9% with the S&P at 12% and 7th out of 77 for the 5 year ROI of 20% with the S&P at 4%.


What this means in practical terms is that Rule #1 strategy is so robust you can even take out the arrows and it does quite well.  And it means that $100,000 invested in 2008 would now be worth about $250,000.  And $100,000 invested in January this year would now be worth about $130,000.


Here’s the data:


This picture shows Rule #1 ROI for 2013 and its corresponding 6th place.

Rule One #6


This shot shows Rule #1 strategy is in 7th place overall of 77 different strategies and up 20% from 2008-2012 while the S&P 500 is up 4% in that time.

Rule One #7



So should you just sign up for AAII and buy the stock it finds.  You could but you’d be violating a fundamental tenet of Rule #1 – Meaning.  You’d have to do a lot of studying to keep up with stocks that come in from so many industry groups.  Also a lot of the stocks are technology.  And the beta of the portfolio is about 170 – significantly more volatile than the S&P even while beating the pants off it.


Still, its a heck of a tool, no?  I’m thinking of setting up a screen like this except a bit more sophisticated and back test it.  If it hits solid singles I’ll start posting up the results monthly if you are interested.  Let me know.


Now go play

June 30, 2013


This is the beginning of creating a Story on the Dutch Postal Company POSTNL:

MEANING: PNL has a quasi-monopoly on delivery of mail in Holland.  The business is in decline as email and overnight delivery gradually replace paper mail and postal shipping.  The question about the industry is not if it will disappear but how long it will take to disappear.  Paper delivery is a virtual right in most developed countries and is likely, in my opinion, to continue to be subsidized for a long time.  The Dutch parliament is willing to help PostNL stay alive by increasing the cost of a letter by 10% in 2013 and eliminating Monday delivery in 2014.  Today, the Dutch pay $0.70 for a letter.  With alternative paper delivery available from UPS and FedEx at many multiples of that price, there is still a place for a national postal service for some time to come.  Again, the question for this investment is “how long?”.


Conclusion: This is all about how fast the decline of postal services will be for Holland (and for America for that matter).  If the decline is offset by rising mail rates and lower employee costs, this company could go on for 20 years.


MOAT: Direct competition against PNL is difficult.  While there is little capex and the cost to enter the business is low, it is a labor intensive business that requires virtually all the labor resources of PNL to compete.  PNL has 30,000 part time employees and 30,000 full time employees.  Most of the business is about sorting mail and hand delivering it by hand.  To compete, a company would have to provide route carriers to walk the same route as PNL carriers, presumably at the same cost, yet, at least in the beginning of the competition, only deliver a small percentage of what PNL carriers deliver.  In other words, the cost structure for a competitor would be similar to PNL’s but with only a fraction of the revenue.  Unless a competitor saw a way to increase revenues apart from trying to take market share, entering this business would be difficult, if not prohibitively expensive. 


And for what purpose?  A competitor would be entering an obviously dying industry, in itself a strong discouragement to entry.  Imagine having the entire market cap of PostNL – about $800 million Euros.  Would you want to invest $800 million Euros to build this business and compete?   I can’t imagine doing so.


Conclusion: They have a big moat as long as their industry survives. 


MANAGEMENT: PNL’s old CEO, Harry Koorstra, resigned a year ago and issued the following statement:  “Such a decision doesn’t get made overnight. The cooperation with the Supervisory Board has been very cumbersome of late, amongst others in relation to differences in opinion about how to serve best the various stakeholders’ interests. Under these circumstances, giving the challenges the company faces, I cannot and will not work. I am leaving without any compensation as I consider principles to be of paramount importance”.


KBC Securities published after the departure and said, “... the exact reasons remain unknown.”  However, there is an indication that the on-going discussions about how to resolve the pension underfunding may have played a role.


The main issue with regard to PostNL’s pension obligations is the requirement to reduce the coverage ratios because of the low interest rate environment.  For example, if a company’s pension obligation is $100,000,000 in 10 years, how much money does it need to have on hand today to meet that obligation 10 years from now?  The answer depends on interest rates.  If rates are 6% then I can do a PV analysis in excel and get the answer; I’ll need about $55 in the bank today to cover it.  But if interest rates are 2%, I’ll need $82 million to cover.  That’s an increase of almost 50% more capital I have to put aside.  It may be that Koorstra told the Board that there was no way the company could handle the extra requirements for pension coverage. 


Here’s a quote from an article in December 2011 ( “PostNL feels it would be imprudent to pay the additional hundreds of millions under the present operating conditions.”  It’s quite likely that statement came from Koorstra. 


And here is a direct quote from him: “PostNL will enter into a dialogue with the pension funds and the trade unions to discuss changes to the pension arrangements. The current arrangements put too much financial pressure on the company. Clearly, we want a good, sustainable pension arrangement for our employees. However, this must be more in line with the realities of today. We recognize the impactful nature of these steps and the unfortunate timing, but they are unavoidable under the present circumstances."


It appears to me, reading between the lines, that Koorstra believed the survival of the company would require the trade unions to reduce their pensions in line with the reality of the business, similar to what happened in Minnesota last year.  It appears to me that the Board was unwilling to go along with a tough stance against the trade unions and it came to a showdown.  Koorstra refused to implement the board’s demand that he find a way to make the company work without changing the pension obligations and he, in good conscience, could not continue to function as CEO.


Damn.  I really like this guy.  Too bad he’s been replaced by someone more ... shall we say ... flexible, less restricted by moral conscience, a friend to the working man .... you pick your poison word ... but to me it boils down to an owner-oriented CEO departing and being replaced by someone more concerned with just getting along.


Here’s more detail on the pension issue:  “Aside from the long-term interest-rate trend, the problematic pension situation has also been caused in part by the unusual position of PostNL’s pension arrangements. For an average employee, PostNL pays a regular premium contribution of about 35% to the pension fund. Other companies in the Netherlands pay a premium contribution of between 20 and 25% on average. Another aspect that sets PostNL apart is that most of its employees do not personally pay a premium contribution to the pension fund. Furthermore, there is no cap on PostNL’s obligation to top up the pension deficit.”


Here’s a recent timeline of events:


13 Jan 2012:  PostNL has been forced to make drastic changes to its operations in response to changing customer needs and the sharp decrease in postal volumes.


27 Feb 2012: Financial results for 2011 reported:

  1. Mail volume declines 7%
  2. Revenues decline 3%
  3. Cash from operations at 220M Euros
  4. Net debt: 1 billion Euros
  5. Pension coverage ratio 99.8%.  Required to be 104%.
  6. “The current pension arrangements are not sustainable, “ says PostNL CEO.


19 March 2012:  Agrees to tender TNT shares to UPS for 1.5 Billion Euros

  1. Use of proceeds: Reduce debt
  2. Restore cash dividends
  3. De-risk pensions
  4. Distribute balance to shareholders


19 April 2012:  CEO resigns


24 April 2012: Herna Verhagen was ‘appointed as CEO of PostNL following a positive advice by the Central Workers Council’.


24  April 2012: Annual General Meeting - the Board of Management has announced it will refrain from the variable remuneration over the year 2012. The reason for this decision is the ongoing reorganisation, the problems with the mail delivery and the impact of this on both employees and customers.


3 July 2012:  PostNL is postponing the opening of new central preparation locations (CPLs) to next year. This also means that no delivery offices will be closed this year, with the exception of the Zaltbommel and IJsselstein offices. Together with the Works Council, the company has developed an approach for a controlled implementation, which will be tested via a number of pilot studies.


4 July 2012: PostNL has submitted an application with the Dutch Independent Post and Telecommunication Authority (OPTA) for compensation of the net costs of the universal service obligation (USO) for 2011. This involves, among others, costs incurred by PostNL to meet the statutory obligation for six-day delivery, retaining 19,000 mail boxes and an extensive network of post offices.


3 September 2012: PostNL announces it will modify its top structure with Board of Directors consisting of the CEO and CFO.  Two key members of management quit as a result.  PostNL is looking for these changes to be “a catalyst for the desired changes in culture.


2 October 2012:  PostNL raises rates for 2013 to 54 euro-cents and for letters to Europe to 90 euro-cents.


3 December 2012: The Disputes Committee has ruled that PostNL must top-up the pension funds with 84 million euros with a potential for another $49 million euros.


6 December 2012: PostNL and the trade unions agree to discuss a new pension arrangement and agree that, linked to it, will be a wage increase of 2.1%.


14 January 2012: The European Commission has denied UPS acquisition of TNT Express.


27 March 2013: Dutch Minister of Economic Affairs intends to adjust the Universal Service Obligation package to increase postal rates 1 July 2013.  PostNL maintains one of the lowest postal rates in Europe.  The Dutch Independent Post and Telcommunication Authority (OPTA) will verify whether these measures are necessary to ensure the profitability of the USO.


16 April 2013: Annual General Meeting:  Nothing new.


Conclusion: The new CEO might be a tool of the union rather than the owner-oriented, honest, driven CEO I'm looking for.  I gotta know more there.


Okay, so ... RULERS ... this is to get you started.  I’m not going to tell you my opinion or my Story of PostNL.  This is for you to figure out.  Is it something you can understand?  Does it have a big Moat that is durable out 20 years?  Do you love the CEO and trust her?  What’s it worth as a business?  Is it on sale?


Now go play.







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