An Investing GOAT Reveals His Principles

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, An Investing GOAT Reveals His Principles The stock market skyrocketed after Donald Trump’s decisive victory in the presidential election. The S&P 500 jumped 3.5% and the Russell 2000 surged 5.8%, as investors believe the newly elected president will deliver pro-growth policies to boost the economy. So, how should investors approach the market? Let’s hear from Stanley Druckenmiller. Stanley Druckenmiller is one of the greatest investors ever lived and has every right to be in the same room with Warren Buffett, delivering a 30% annual growth rate for nearly three decades. And he is still going strong. He recently did an interview with In Good Company where he revealed some of his investing principles. Stanley Druckenmiller (Photo: In Good Company) Notably, he doesn’t see “any material signs of weakness” in the economy right now. - “We're not seeing any material signs of weakness other than maybe in the housing market but that's from a very elevated price level … we're not seeing bottom up in information indicating to us that there's an economic problem anytime in the next 3 to six months.” He pointed to financial conditions as the reason why the economy is rising. He called financial conditions “very, very loose.” So, he is more worried about inflation going forward than the economy itself. (In fact, he shorted bonds. The reason is simple — bond prices fall when interest rates rise. Druckenmiller thinks rates will end up going higher due to higher inflation.) He mentioned the 1970s when inflation flared up. He said: - “I’m a little worried that the Fed has declared victory too early.” At the same time, Druckenmiller added that he didn’t have the same amount of conviction (for inflation going up again) as he was during the pandemic that inflation will surge after money supply was growing 40%. Regardless, he is also not convinced that the Fed has beaten the inflation. He thought a 50 basis-point cut with gold at all-time highs and stocks surging may be too aggressive. However, Druckenmiller doesn’t believe the threats of higher rates would affect the economy until late 2025 to early 2026. Why? Many corporations took out loans while rates were rock-bottom and won’t need to roll over until 2025 and 2026. Same thing with mortgages. He warned of a “trust moment,” saying: - “You just don't know what is it that can create this kind of trust moment where people suddenly change their mind in terms of the price they want to have to lend money to. It could be a failed auction, it could be if the Fed is wrong about inflation and it turns back up again because they're easing financial conditions into a melt up, if they were to have to start increasing interest rates again…” The interviewer asked Druckenmiller how he was able to get in early trends like AI chips (Nvidia) and anti-obesity drugs. He saw early that losing weight without work would be a blockbuster product. What’s more, he liked the play even more after learning that people will gain the weight back if they get off the drug. So, he called it a “razor blade business” where consumers must keep buying drugs. (Photo: Bryant University) So, he is constantly on a lookout for those types of products that could turn into a blockbuster. And he prefers to hold stocks for two to four years for big trends, rather than 20 years. Interestingly, Druckenmiller followed the strategy of “invest, and then investigate.” When he sees a big trend, he rather to invest quickly then investigate on it further. If he doesn’t like it, he would sell it. Otherwise, he would buy more if he likes it. - “I've always had the view that markets are smart. They're fast and they're getting much more so with all the communication and the technology we have today. If I hear a concept and I like it, if I wait and spend two or three months analyzing it, I may miss big part of the move and then psychologically be paralyzed.” Lastly, Druckenmiller talked about how important it is to “never invest in the present, always try and envision the situation as you see it in 18 to 24 months, and then see if you feel things would be different than they are now and would security prices reflect that.” For example, an investor might see a company that is losing money. Everybody in the industry is shutting capacity down. Druckenmiller said it doesn’t take a “rocket scientist” to envision 18 to 24 months, and if nobody is adding capacity, the company is poised to make a lot of money. Reports of the Death of Broadcast Television Are Greatly Exaggerated Today’s Pick: TEGNA Inc. (TGNA) Media pundits have been writing the epitaph of traditional broadcast media for years. Maybe that’s why TEGNA still trades at a 7.41 P/E even though the company has been growing its free cash flow by 17% CAGR since 2018. We will explain why local broadcast networks aren’t dead, despite what the headlines have said. In fact, they’re growing quicker than you think. Vast Nationwide Reach. For years, TEGNA’s core business has revolved around the local networks they own. Just take a look at how much of the country they cover: (Source: TEGNA Investor Presentation) Diversification Into Digital. Tegna hasn’t settled for just being a local broadcaster. They’ve also acquired a number of digital media properties, and the most important one is TEGNA’s ad network for local advertisers to reach viewers on streaming apps: (Source: TEGNA Investor Presentation) TEGNA also owns these digital properties: - Websites and apps for their local networks drew about 44 million unduplicated monthly visitors. - The LockedOn local NFL and NBA podcast network drew nearly 28 million downloads in Q1 of this year. - Content studios with a national reach like VERIFY, True Crime Network, and VAULT Studios. Winning Formula of Content and Local Reach. Each local affiliate (owned by TEGNA) controls the rights to distribute content from major networks within their region. They also produce local content that caters to people who live in that area. In other words, they own a mini-monopoly in its local area. For TEGNA, owning a bunch of mini-monopolies has been lucrative. The company gave guidance of generating adjusted free cash flow of $900 million to $1.1 billion. Its current market cap is $2.97 billion. That is about a third of the market cap! Sure enough, its dividend yield is robust at 2.79% Highly Profitable. Their growing local affiliates and their digital properties combine for a fantastic profit margin of 15.5%. Their profits equate to a 15% ROE. The company promises to return between 40% and 60% of adjusted free cash flow to shareholders over the 2024 to 2025 period. Bottom Line: TEGNA is a profitable and surprisingly fast-growing business, with shares priced as if the company was a dinosaur that investors mistakenly assume when they hear “broadcast television.” [SHOP NOW](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](