Tonight the NFL kicks off and this brings a real dilemma. Being a Baltimore boy from way back I am still a Ravens fan but I would love to have an instate team to cheer for during the year as well. The problem is that none of the Florida teams are very good and worse, they have been boring to watch. The Jaguars are just out as I am still trying to figure out what the hell a Jaguar has to do with Florida. Tampa Bay has some appeal as anytime you get to dress in pirate themed gear it’s a party but they have been horrible and I am not a big fan of famous Jameis either. I lean towards the Dolphins in honor of Kiick Csonka and Griese , to say nothing of the great Don Shula, but the wife thinks they have sissy uniforms. For now I will stick with Baltimore and sneak peaks at the Miami games to see if the team is good enough to watch this year. Which of course means that for tonight I am a big fan of deflated balls and the New England Patriots as anytime the Steelers lose, it’s a win for the Purple and Black.

The big new this week is that David Tepper has turned somewhat bearish on stocks. While lots of folks have done that over the last year or so Tepper has been unabashedly bullish until now and has made a ton of money loading up on stocks. He told CNBC this week that “I’m not as bullish as I could be because I have problems with earnings growth, problems with multiples. I can’t really call myself a bull.” He added that he would take some money off the table if he was fully invested and that being flat was not a bad idea in the current market conditions. He also said that he would be a buyer if the market corrected by 20% or more.

That has been my position for some time. The market simply is not cheap right now and its difficult to find safe and cheap ideas. To further complicate matters the fundamentals of many companies have been slipping as the economy remains in slow growth mode and commodity prices are falling.This week we sold a bunch of stocks that while they may be cheap, the margin of safety had deteriorated substantially over the past few quarters. We need a steep correction in order for the type of deep value opportunities we look for are readily available.

An interesting question that comes up a lot is when to start buying as the market is falling. The answer is of course you do not know and you have to buy bargains with expectation that they will keep falling before recovering. Back in 2009 Seth Klarman explained the process in his shareholder letter saying” While it is always tempting to try to time the market and wait for the bottom to be reached (as if it would be obvious when it arrived), such a strategy has proven over the years to be deeply flawed. Historically, little volume transacts at the bottom or on the way back up and competition from other buyers will be much greater when the markets settle down and the economy begins to recover. Moreover, the price recovery from a bottom can be very swift. Therefore, an investor should put money to work amidst the throes of a bear market, appreciating that things will likely get worse before they get better.”

He added some advice that rings particularly true today. He cautioned investors that “Especially in today’s difficult environment, money managers must keep firmly in mind that the only things they really can control are their investment philosophy, investment process, and the nature of their client base. Controlling your process is absolutely crucial to long-term investment success in any market environment. Investing is hard enough. Success virtually requires that a process be in place that enables intellectual honesty, rigor, creativity, and integrity.” We have a process that I know works over time. I know that it underperforms as we near a market top. I know that the returns from the deep value approach are quite lumpy with the lions of the returns are earned following a steep collapse in stock prices. I know that deep value has been lagging since about 2013 (you know- right when I started the Deep Letter in yet another example of my excellent timing skills!) and that it won’t last forever. Staying the course has always worked out in my favor and I expect it will this time as well.

Of course the underperformance of the deep value portfolio has been offset by the outperformance in the banking on profits portfolio. We started that letter at the same time and in two years we have had 79 stock picks with 76 of them generating positive returns and the largest individual loser falling a whopping 2%. We are handily beating the market and are up more than 9% year to date while the market is down and the portfolio return over the past year is about 50% higher than the community bank stock ETF (QABA). We are adding more features to the letter in the near future and will be raising the price to reflect the fact that we have proven the point about investing in community bank stocks based on our criteria. We have closed 9 positions with an average gain of 56% so far. It works and it works extraordinarily well.

I am also aware that I have to limit the number of subscribers if we are going to continue to work with these very small illiquid names. In order to grow what I earn from the banking on Profits Service and justify the time and effort put into making Banking on Profits the best bank stock service available, we have to go back to the original price point. That was $999 but I am just going to ignore the marketing tricks and says its $1000 a year starting October 1, 2015. Current subscribers have been early adopters of the service and we will lock them in at the current $399 price for life as a token of my thanks for helping get Banking on Profits launched these past two years.

If you have been on the fence or just procrastinating that offer remains open to you for the rest of the month. If you sign up this month you are locked in at the $399 point. If you give someone a gift subscription to Banking on Profits they will be locked in at $399 for life. After October 1 the price goes up and we will not be discounting the regular service. The monthly newsletter will be going up to $199 as we are adding content to that service as well but you will continue to get that free for the life of your subscription. That’s a pretty good deal on a highly specialized research and investment service that has been proven to provide market beating returns.

Plato said it best when he said “The beginning is the most important part of the work.” Click here and lock in the current price on Banking on Profits for the life of your membership.

That’s all for me this week. The crack staff needs a walk and its my turn to make dinner so I need to run to Chick- Fil- A

Tim

Without a process to invest in stocks you really are not much more than a https://www.youtube.com/watch?v=jMwhs01Y21s&index=6&list=PLA755B6D20A043673