In investing, I like to keep it simple. Why complicate something that doesn’t have to be complicated?
To keep things simple, I strongly encourage you to pay less for something than it’s worth.
If the market is willing to charge you $15 for a stock that you know is worth $20, strongly consider it.
In today’s Market Insights video, I talk about one stock you can buy at a discount.
(If you’d prefer to read a transcript, click here.)
Investing in Taxes
Here’s a question for you: Why do we do the things we do to ourselves? Why do we have to make things so complicated?
I get questions all the time from people who want a good deal in the market. And it’s a great question. In investing, I like to keep it simple. Why complicate something that doesn’t have to be complicated?
For example, what does the future hold? I’m not looking for a detailed answer. Just stop and say the first things that come to your mind.
Of course, you could say death and taxes. If you did, I’d suggest buying a publicly traded funeral home and a tax preparer.
The former is elusive. But if you’re talking taxes, you’ve got H&R Block Inc. (NYSE: HRB), as well as Intuit Inc. (Nasdaq: INTU), the maker of TurboTax. These are two simple ideas.
H&R Block is trending higher and pays a solid 4.5% dividend yield. You can’t get that from your bank or from a Treasury bond.
And all Intuit does is go up.
Again: Don’t make this more complicated than necessary.
But death and taxes are pretty morbid topics. What else does the future hold?
You don’t have to be a computer programmer to know it includes tech: the Internet of Things, fintech, cryptocurrencies, Big Data, 5G, artificial intelligence, driverless cars, etc.
If you want to learn more about any of these, the answer is also simple. Check out Ian King’s Strategic Fortunes newsletter. You can see a link to it below my picture. I’m telling you, just do it.
OK, so, finally, in the search to keep things simple, I strongly encourage you to pay less for something than it’s worth. If the market is willing to charge you $15 for a stock that you know is worth $20, strongly consider it.
For example, take a look at these numbers for 180 Degree Capital Corp. (Nasdaq: TURN).
This stock’s net asset value, or NAV, was $9.28 per share at the end of the year. The S&P 500 Index was up more than 6% in the first quarter, and it’s up another 5% since then.
It’s logical to believe that this stock’s NAV is now greater than $9.28 per share. That’s not a stretch. It’s a simple conclusion, but I’ll bet it’s correct. Can you guess what it’s trading for? During intraday trading today, TURN is trading for $7.30.
If I assume its NAV is still $9.28 cents, that’s almost a $2 discount. And I’ll bet it’s higher.
You see, on April 5, 180 Degree announced the public portion of its portfolio had risen 28% percent since the end of 2020. The public portion of its portfolio had grown by a $1.60 per share. By that I mean the stock that you can buy on a public exchange and the cash the company holds.
We don’t know exactly about the private portion of the portfolio or how much the corporate expenses were. Not until the company reports, which will be any day now.
I’m just saying, keep it simple. 180 Degree Capital’s NAV is likely greater than it was at the end of the year. It should be more than $10, but it’s trading for $7.30.
Investing can be complicated if you let it be. But this discount for 180 Degree Capital makes sense to me. It means I can buy shares for much less than they’re worth. You can too.
Thank you for watching, everyone. Be well.
Editor, Profit Line