I’m not trying to re-invent the wheel here at Market Plunger. Simply put, I try to find great businesses trading at substantial discounts to their intrinsic business value. Stocks aren’t blips on a Bloomberg screen, they are pieces of ownership in actual businesses. If I can find 10 – 15 of these great businesses that display characteristics such as: large insider ownership, growing FCF yields, a cheap purchase price, easy to understand business models, and a large margin of safety, I believe I will outperform the market indices on an absolute, long-term basis.
Most of the companies we choose to become part-owners in are in the smaller, more illiquid corners of the market. I find these areas fruitful grounds for discovering great businesses that aren’t covered by Wall Street analysts or easily found of standard “value” stock screeners. Along with these businesses, a portion of the portfolio is dedicated to special situations such as SPACs, spin-offs, and LEAPs.