We closed the TXN position on November 12, 2019. A copy of the associated Position Update report is here.
We published an update on AZO on May 26, 2021. A copy of the associated Earnings Update report is here.
October was a rough month for investors. The S&P 500 lost $1.9 trillion in its worst month since September 2011. The “FANG” stocks were among the hardest hit. Amazon (AMZN), Netflix (NFLX), Alphabet (GOOGL), and Facebook (FB) ended the month down 20%, 19%, 10% and 8% respectively.
This drop presents an important lesson for noise traders – when momentum stops, and fundamentals come into focus, the damage to one’s portfolio can be severe.
In volatile times like these, our message to investors remains the same: focus on fundamentals. True value investing has gotten harder, but it isn’t dead. In order to find value, investors need to look beyond the widely-available and misleading accounting results (noise) on which most people focus. Investors need to “get back to the basics” of reading footnotes and focusing on economic earnings and return on invested capital (ROIC), the true drivers of valuation.