Improving Value Situations
Changes to the newsletter for 2023.
Value Situations is NOT investment advice and the author is not an investment advisor.
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As I mentioned in my 2022 Review & 2023 Outlook piece, since launching the paid tier last May I’ve received lots of thoughtful feedback from subscribers on various aspects of the newsletter. In the spirit of improving it and adding more value for subscribers I’ve decided to start 2023 by making some changes based on this feedback.
The overriding feedback has been that subscribers like the conviction ideas I’ve written about to date, but many of you would like to see new ideas published more frequently than the current run-rate of 2-3 per quarter. Since the launch of the paid tier last May I have published 6 actionable ideas, equating to a new idea every 5-6 weeks, in line with my targeted publication rate at the time of launch. This further equates to an annualised idea generation rate of ~8-10 actionable ideas, which might not seem a lot to some readers, but as anyone who has worked in a buy-side equities role can attest, finding 4-5 compelling ideas per year (or approx. 1 new idea per quarter) is considered a very good year. The simple reality is that really compelling AND actionable ideas cannot typically be found (or adequately analysed) on a weekly basis (aside from moments of extreme market dislocation, such as during the spring/summer 2020 rebound following the COVID market crash).
Last January I introduced the free Weekly Bulletin, which was intended to be a more concise round-up of thoughts and ideas on markets compared to previous weekly editions of the newsletter, to allow me spend more time generating actionable ideas for subscribers. On reflection I feel I spent too much time on macro/market commentary in 2022, rather than focusing on fundamental equity ideas. Given the extreme volatility of markets and macro forces last year, it was certainly helpful to write down and clarify my thoughts on what was happening in markets in order to identify areas of opportunity in public equities (and which led me to some interesting names now in the Model Portfolio). However the Bulletin probably suffered from macro-overwhelm as a result, as well as detracting from my idea generation process. I intend to remedy this in 2023, which should lead to paid tier subscribers getting more value from their subscription.
This dovetails with the second most frequent piece of feedback received, which is that while readers have found the Weekly Bulletin interesting, the overwhelming preference is for new equity ideas over market commentary. Therefore, based on this feedback and in the interest of delivering greater value to paying subscribers I am modifying the newsletter format for this year, as follows:
I am discontinuing the free Weekly Bulletin to focus solely on equity ideas, and moving all content to the paid tier. For those looking for free content only, I would suggest following my Twitter account @ValueSituations, where I often post market thoughts and comments, separate to this newsletter.
The paid subscription offering will continue to focus on public equity ideas that fit my value situation framework, and will comprise the following:
Quick Sits - short-form write-ups of actionable ideas that I regard as opportunistic “value trades” e.g. Saipem (up ~75% in ~6 months since I highlighted it) or SLCA (which appreciated 110% in ~6 months between publication in Oct-21 and Apr-22 peak last year). Given the upside from such ideas in the past, I feel it no longer makes sense to publish these for free.
Watchlist Ideas - equity ideas that are potential conviction ideas that are not yet actionable, but approaching actionable levels.
Conviction Ideas - longer-form, investment memo style write-ups on conviction ideas (typically 2-3 year investment holds), as published to date (e.g. Deep Breath, Deep Value, Gas Panic!, A Fertile Value Situation).
In extending the scope of idea coverage across these 3 categories, this should allow me adequately address subscriber feedback by publishing interesting ideas on a more frequent basis, ultimately providing more value for subscribers.
In addition paid tier subscribers will continue to have access to my Model Portfolio, which will now hold both conviction ideas and opportunistic “Quick Sits” ideas that I find particularly compelling.
Pricing for paid tier subscriptions will remain as-is, at $50/month or $500/year (despite recent inflation!). I continue to believe this is a compelling value proposition, in that readers are getting professional, buy-side quality ideas and analysis for a fraction of the cost of employing a professional analyst.
Finally, my sincere thanks to all readers of the newsletter to date, and particularly to the paid tier subscribers. As I wrote in the launch post for the paid tier, this newsletter is a serious and full-time endeavour for me and is 100% supported by paying subscribers. In writing this newsletter, my job is essentially to generate interesting and actionable ideas for subscribers that supplements their own idea origination process. Hopefully subscribers will continue to find this to be the case in 2023.
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