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ValuFocus Investing: A Cash-Loving Contrarian Way to Invest in Stocks by William F. Mahoney, Rawley Thomas

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Section One

The LCRT Investment Process

Section I outlines the LCRT (LifeCycle Returns, Inc.) investment process.

Chapter 1: Introducing Our Investment Process
Chapter 2: A Better Way to Invest in Stocks
Chapter 3: Advantages of Economic, Cash-Based Modeling
Chapter 4: Analyzing Mental Models
Chapter 5: The Value Creation Process
Chapter 6: The Corporate Perspective

Chapter 1: Introducing Our Investment Process

1. Investors should buy, sell, and short stocks based on the intrinsic value derived from the economic fundamentals of the underlying firm's business.
2. Investors should concentrate first and foremost on the long-term cash fundamentals of the business to produce intrinsic valuation levels, not short-term price momentum or multifactor approaches created from price change models.

Chapter 2: A Better Way to Invest in Stocks

Base your investment decisions primarily on the under- or overvaluation of the whole market and the individual stocks within that market.
Identify “inflection points” where prices are likely to reverse direction by possessing a better understanding of the ranges of bounded rationality around intrinsic valuation as the anchor.

Chapter 3: Advantages of Economic, Cash-Based Modeling

A focus on the economics of a business and its cash flow leads to holding stocks longer. Longer-term investors help make the market more efficient. The market increasingly has become more short-term driven because of the widespread use of models built on price ...

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