Special Access: “The Little Book of Picking Top Stocks”

Renowned credit analyst Martin Fridson has arranged with his publisher to give Porter & Co. readers a special look at the first chapter of his latest book. This book focuses on stocks that came in #1 for the year in total return within the S&P 500 and what caused them to achieve that distinction.

Editor’s Note:

Porter & Co. follows a lighter publishing schedule in August, which gives our team a little breathing room to enjoy time with their families. But we’re still monitoring portfolios, and sending updates on our open positions for all our services.

And each week during the month, Big Secret readers will receive a short issue with a special literary excerpt or investing insight that you won’t see anywhere else.

Don’t forget: while you’re waiting for “business as usual” to resume the first week of September, there’s still plenty to do...

Please, go through our back issues, which include many valuable buy-and-hold recommendations and timeless stories. (We’ve recently updated our website, giving subscribers a simpler way to access all our reports and recommendations on a single dashboard.)

We believe strongly that the best investment time horizon is forever. Time is our greatest advantage as investors in capital efficient, high-quality businesses – as you’ll see in the results of our portfolio.

At the very least, we hope you will become familiar with our strategy by understanding our investments in Hershey, NVR, WR Berkley, and Domino’s. There’s a lot more to these businesses than their customers realize. And when you begin to understand the financial architecture that lies underneath these companies’ products and services, you’ll be on your way towards becoming a great investor.

We hope you’ll remember who showed you these secrets and remain a paid-up subscriber for as long as you hold these investments – forever!

And now, please enjoy today’s special issue...

Earlier this year, Porter & Co. hired renowned credit analyst Martin Fridson to head up our new Distressed Investing team, which finds “unfairly distressed” bonds and equities that eventually rebound to generate significant capital gains. (Our Partners have full access to Martin’s publication, Porter & Co. Distressed Investing.)

In every issue of Distressed Investing, Martin includes a perfectly phrased four-line poem that distills his investment thesis.

For instance:

His prowess with poetry isn’t surprising. In addition to being “the most well-known figure in the high yield world,” according to Investment Dealers’ Digest, Martin’s also a literary luminary. His light verse has appeared in publications ranging from Playbill and the New York Times to the Wall Street Journal.

He’s also authored six modern investment classics – including Financial Statement Analysis, which The Green Magazine calls “one of the most useful investment books ever,” and Unwarranted Intrusions, which the Boston Globe said should be short-listed for best business book of the decade – and edited many more.

And this August, he’s arranged with his publisher to give Porter & Co. readers a special look at the first chapter of his latest book, The Little Book of Picking Top Stocks. This book focuses on stocks that came in #1 for the year in total return within the S&P 500 and what caused them to achieve that distinction.

Martin describes the excerpt you’re about to see as “the Reader’s Digest version of my no-holds-barred look at the reality behind conventional securities analysis –an undiluted rendition of the juiciest stuff in the exposé.”

And what’s he exposing, you ask? Simply put, Wall Street’s research methods won’t help you zero in on the stock that will lead the pack in the coming year. Those celebrity analysts focus on long-discredited metrics like earnings per share, perpetuating the mistaken belief that low-volatility earnings produce superior returns for shareholders. (And sometimes they rely on even wackier methods, like astrology.)

What should they (and we) be looking for instead? How do we actually identify ultra-high-return equities? Well, that’s where the rest of the book comes in...

If you love what you see, you can buy Martin’s book here.

We’re honored to work with an expert of Martin’s caliber, and each month, our Partners receive full access to his recommendations in Porter & Co. Distressed Investing. If you’re not one already, you can learn more about becoming a Partner here.

In the meantime, please enjoy this exclusive excerpt from The Little Book of Picking Top Stocks.

We also have a portfolio update on some of our open positions ready for paid-up members of Big Secret on Wall Street. (Become a member here.)

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