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July 2019 Management Newsletter
“People know the price of everything and the value of nothing”, Oscar Wilde.

Dear fellow investors,

Overpaying for a company or any other asset always leads to disappointment. There are two possible causes: either the quality of the company is not as good as initially expected; or the price at which it can be resold has fallen despite the company delivering on its promises (multiple compression).
We gave an example of this situation in a previous newsletter: L’Oréal, one of the finest companies in Europe, doubled its earnings between 2000 and 2010, but the share price did not move as the P/E ratio halved over the same period (see Newsletter for March 2019).
In 2019, the market’s enthusiasm for predictable, growth stocks gradually reached extreme levels. ...

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