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Tim Melvin


The 20% Letter

About Tim

Tim Melvin is a 30-year plus veteran of financial markets. He is also the editor of The 20% Letter. Mr. Melvin uses rigorous quantitative analysis based on the principles used in deep value and private equity styles of investing to help investors compound their wealth using strategies designed to maximize profits and minimize risk. He uses in-depth research efforts to uncover special situation opportunities that can profit regardless of market direction. Mr. Melvin has also developed models for building alternative income portfolio that can help individual investors uses income producing portfolios previously available only to individuals. He believes that individuals have powerful advantages over institutions but are not taught how to use them. Mr. Melvin wants to be the one who helps individual investors stop taking entirely too much risk for too little return.

Tim's Articles

I like to buy when no one cares, or flat-out hates, real estate. That is precisely the environment right now. The only asset class that is hated more than real estate is banking. VICI Properties Inc. (VICI) is one of the world’s highest-quality collections of real estate and you should consider it, recommends Tim Melvin, editor of The 20% Letter.
There is no magic in investing. While everyone is out there chasing magic and impossible dreams, there are some of us who show up to work every day and focus on buying quality businesses. I like NexPoint Residential Trust Inc. (NXRT) here, says Tim Melvin, editor of Takeover Letter.
I have adopted many of the principles of one of the greatest figures to emerge from the history of Wall Street, Bernard Baruch, in the approach I use here at the Takeover Letter. The most significant adaptation is a stoic, numbers-based approach that relies heavily on the math of credit analysis and corporate valuation. One name I like is Oil States International Inc. (OIS), notes Tim Melvin, editor of Takeover Letter.
I am looking at the opportunity that comes from investing in tax-free bond closed-end funds. Most people do not understand that taxes are going up before too long. It is inevitable given the mismanagement of the federal budget and balance sheet. I like the Nuveen AMT-Free Quality Municipal Income Fund (NEA) here, counsels Tim Melvin, editor of Underground Income.

Tim's Videos

Banks are currently trading at about a 50% PE multiple of the historical average multiple with a discount to the S&P 500 PE above 50%. Ever wonder why your local banks get gobbled up by the big banks? Because scale matters. Banks below $1 billion in assets are starting to feel a sense of emergency as margins are thin and competition is intense. They need to find a profitable niche that allows for high returns in equity and assets or sell their bank. Buying smaller banks and taking out costs (as much as 30% or more) and raising the ROA on acquired assets is still the best way to grow EPS for bank executives worried about how they'll grow. Shareholders in these small banks - that's us - often see big profits when takeovers are announced. Thanks to Covid and inflation, there is pent-up M&A demand on the part of both sellers and buyers. In this presentation, Tim Melvin will show you his three rules for evaluating small banks as potential takeover targets, his strategy, and even a few names and tickers to consider adding to your portfolio.