Postcards: The Best Day of the Year

I'm dreaming of a wire-to-wire season. But we might be on a five-year plan. Approach your investments the same way. Win, baby. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: The Best Day of the Year]( I'm dreaming of a wire-to-wire season. But we might be on a five-year plan. Approach your investments the same way. Win, baby. [Garrett {NAME}]( Mar 28   [READ IN APP](   Dear Fellow Expat: O-R-I-O-L-E-S. Magic. Magic. Magic. Magic. Orioles magic… Raise your glass… “For the Birds.” This year… we will lose in the World Series to the Atlanta Braves… But we’re going to get there… and all I can ask for is to sit next to my parents during an Orioles World Series game. I did this with the Cubs in 2016. It was a hell of a party. If the Orioles win the World Series… oh man. Want to see a 43-year-old cry? Like sob… a three-time graduate student unable to form sentences? Do you know how you buy a lottery ticket and drive home thinking about how you would spend the money? That’s what I do with the Baltimore Orioles. What would I do if the Orioles won the World Series? I’d cry… a lot. Like irrationally. Second… I don’t know. I haven’t gotten past the sobbing part of the equation. There is a bonus. You’d get to watch my 54-year-old brother cry, too. “I LOVE YOU BROTHER…” —— “I Love you too!” —— “Go Birds….” I suppose it’d be weird to watch two alligators cry crocodile tears… but… Baseball is entrenched in our hearts - the {NAME} family. I’m fortunate enough to have married into a staunch Orioles fandom. Tim (my father-in-law) probably wears an Orioles Hawaiian shirt today… or the Grateful Dead Orioles shirt I bought him. We back the Birds. A Question I got a great … great… question today from a subscriber. Should they buy a stock because it’s “cheaper” than one of its rivals. Now… “cheaper” in that question meant nominally. For example… $5 is less than $10. But that’s not how this works. We have to look at the price of the stock… and compare it to a few metrics. How are these prices determined? While many factors play a role, understanding intrinsic value and cash flow can illuminate this financial enigma. At the heart of stock pricing is the notion of intrinsic value – a company's real, underlying worth based on objective measures. Tim Melvin (again, my father-in-law) likes to tell a story about walking around Disneyland and determining Disney’s value by selling all of the metal at scrap value. That’s “Deep Value.” He also loves to cite [Danny Devito’s monologue in Other People’s Money t]( explain the “true value” of a company. When we look at a company’s real value, we must calculate assets, earnings, dividends, and, importantly, the cash flows it generates. Smart investors seek intrinsic value, which is their estimate of a company's true value, irrespective of current market prices. We don’t speculate on a momentum stock and try to buy it for a dollar and sell it for two. This is about “worth” and “wealth.” Cash flow is our friend. Cash flow, the amount of cash and cash equivalents being transferred into and out of a business, is a critical component of a company's intrinsic value. It's a tangible indicator of a company's financial health. Positive cash flow means a company has more money coming in than going out, a sign of financial strength that can boost investor confidence and the stock price. In a normal world, the company's earnings and the broader economic environment influence a stock's price beyond intrinsic value and cash flow. High earnings and positive cash flow often lead to a higher stock price because they indicate the company is doing well. (Again, plenty of stocks are trading at irrational valuations. Shipping and energy stocks are “cheap” right now). Economic factors like interest rates and overall economic growth also affect stock prices, impacting company operations and investor sentiment. Market sentiment, the overall mood or attitude of investors towards the market, can cause stock prices to fluctuate. Positive news can create demand, pushing prices up, while negative news can lead to selling, driving prices down. Ultimately, the stock price at any given moment is where supply meets demand – the equilibrium point where buyers and sellers agree on a value. Understanding a stock's price involves examining its intrinsic value, which is significantly influenced by its cash flow, and considering external factors like the economy and market sentiment. Some stocks are “worth” $5. Some are worth $400. In a rational world… again… the stocks reflect the company's business, cash flow… and expected future returns. Yes, it comes down to the number of shares… and really digging into the company's true value. Just because a stock is $5 doesn’t mean it’s “cheaper” than the one worth $400. If you’re interested in knowing what a company is “worth…” Check out [Tim’s work. He’s the value guy.]( He focuses on the real value of businesses. If you’re a trader looking for a place to “put money,” this is a good place to be. [He’ll break it down for you.]( I’m going to watch baseball now. No interruptions. Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()