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Geoff Gannon January 26, 2020

Hilton Food (HFG): A Super Predictable Meat Packer with Long-Term “Cost Plus” Contracts and Extreme Customer Concentration at an Expensive – But Actually Not Quite Too Expensive – Price

Hilton Food Group (HFG) trades on the London Stock Exchange. It qualifies as an “overlooked stock” because it has low share turnover (17% per year) and a low beta (0.28) despite having a pretty high market cap (greater than $1 billion in USD terms). On a purely statistical basis, Hilton Food is one of the most predictable – in fact, in one respect, literally THE most predictable – companies I’m aware of. There’s a reason for this I’ll get into in a second. But, first...

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Andrew Kuhn January 22, 2020

Your Greatest Advantage as an Investor in 2020: FOCUS

For this week’s post, I decided to talk to the camera. Be sure to watch if you haven’t here.…

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Luke Elliott January 17, 2020

AdvanSource Biomaterials Corp. (OTC: ASNB) – An Attractive Microcap Arbitrage Opportunity With Limited Risk

17 Jan 2020 Quote: $0.18/share     AdvanSource Biomaterials designs and manufacturers materials used in medical applications. They primarily make polyurethane materials that are used in long and short-term implants and disposable products (plastics).  The business has been around for 20 years but neither the history of the business nor what they do make much difference to the investment case. On November 25, 2019, AdvanSource announced that they had entered into an agreement to sell all of their assets to a subsidiary of Mitsubishi Chemical Corporation for...

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Andrew Kuhn January 13, 2020

9 States in 5 days

9 states, 5 days, 2,092 miles, 32 hours of driving, 3 different companies, a ton of fast-food, 1 tornado scare, and a helllllllllllllllllluva lot coffee later, Geoff and I have finally finished our research trip and are back in good ole’ Dallas, Texas. It was a productive trip, and I thought I’d spend this week’s post talking a bit about the trip without revealing the companies we visited, for obvious reasons. (I know, I know – super annoying).

First, and most importantly – my biggest takeaway is that I think as investors WE ALL often forget that every stock we analyze and form extreme opinions on from public filings 100+ miles away are, in fact, real businesses. Everyone says they know this, but then you read or listen to their thoughts and it conveys the opposite. Real businesses are run by real managers. Real businesses have real employees. Real businesses have real assets. Real businesses have real customers. These real businesses are most likely very important in their real communities. And, the real people of these real businesses most likely have good intentions and are just trying to do the best that they can.

I truly think every serious investor should implement company visits and in-person scuttlebutt in their routine as much as possible. I think doing this helps take stock-price-gyrations out of the real business, and should help keep the big picture in mind – which is finding great companies that can compound their net worth for years to come.

One thing I often talk about on the podcast is being the customer in the companies you’re analyzing — experience what the real customers experience. If you’re thinking of investing in Disney, watch some content on Disney+. Plan a trip at Disney World. Eat at the park. If you have children, observe their reactions and mood. Basically, try to connect with why individuals use the product/business from an experience perspective. Have a journalistic mindset. This is all stuff that you can’t learn from a 10K.

Investing has a level playing field. Other people can read the same information that you can. I think putting in the additional work to go the extra mile (or 2,092 miles) in your research is what can separate the good from the great. Warren Buffett, in his early days, did this all the time – and it’s something that I think investors overlook due to information overload via the internet. Someone once asked Warren about Phil Fisher’s Scuttlebutt method at an annual meeting. Below was his response.



AUDIENCE MEMBER: My name is Travis Heath (PH). I’m from Dallas, Texas. And my question regards what Phil Fisher referred to as “scuttlebutt.” When you’ve identified a business that you consider to warrant further investigation — more intense investigation — how much time do you spend commonly, both in terms of total hours and in terms of the span in weeks or months that you perform that investigation over?


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Andrew Kuhn January 5, 2020

One of My Goals For 2020 – Blog More! 

To Focused Compounding Members,


I hope everyone had a great holiday! Let me start by saying I am not one for New Year’s resolutions. I genuinely believe you should start today instead of tomorrow – and that an arbitrary date should not dictate when you should work to become the better version of yourself.


That said, one of the things I wanted Geoff and myself to do before the new year was to write down 5 goals that we would be proud of if we accomplish by this time next year. We had professional and personal goals. I decided on 5 because this was right out of Warren Buffett’s 5/25 strategy for focus. You can learn about that below from James Clear’s blog post below. (Hopefully James won’t mind me stealing his story if I link to his great book, Atomic Habits:




“The Story of Mike Flint


Mike Flint was Buffett’s personal airplane pilot for 10 years. (Flint has also flown four US Presidents, so I think we can safely say he is good at his job.) According to Flint, he was talking about his career priorities with Buffett when his boss asked the pilot to go through a 3-step exercise.


Here’s how it works…


STEP 1: Buffett started by asking Flint to write down his top 25 career goals. So, Flint took some time and wrote them down. (Note: you could also complete this exercise with goals for a shorter timeline. For example, write down the top 25 things you want to accomplish this week.)


STEP 2: Then, Buffett asked Flint to review his list and circle his top 5 goals. Again, Flint took some time, made his way through the list, and eventually decided on his 5 most important goals.


Note: If you’re following along at home, pause right now and do these first two steps before moving on to Step 3.


STEP 3: At this point, Flint had two lists. The 5 items he had circled were List A and the 20 items he had not circled were List B.

Flint confirmed that he would start working on his top 5 goals right away. And that’s when Buffett asked him about the second list, “And what about the ones you didn’t circle?”


Flint replied, “Well, the top 5 are my primary focus, but the other 20 come in a close second. They are still important so I’ll work on those intermittently as I see fit. They are not as urgent, but I still plan to give them a dedicated effort.”


To which Buffett replied, “No. You’ve got it wrong, Mike. Everything you didn’t circle just became your Avoid-At-All-Cost list. No matter what, these things get no attention from you until you’ve succeeded with your top 5.”





One of my goals for 2020 is to write a lot more. To quantify this, I’m committing to one post a …

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Geoff Gannon January 2, 2020

Geoff’s Thoughts on Cheesecake Factory (CAKE)

Someone asked me my thoughts on Cheesecake Factory. It’s a stock we’ve looked at before. But, I have written about it recently. The stock hasn’t done well lately. It looks fairly cheap. Here was my answer: “I haven’t followed it lately. I know the stock hasn’t done that well. I did a very quick check of the stock price just now looking at the long-term average operating margin, today’s sales, today’s tax rates, etc. It seems that on an earnings basis (normalized for a normal...

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