American Express is undoubtedly a company you're familiar with. It was founded in 1850, 170 years ago, and still pervades our daily lives. Yet most people, and many investors, underestimate how powerful its business model is.

We have studied and admired AutoZone for a number of years and finally got the opportunity to purchase our first shares in March. We continued buying in early April. Our average cost is approximately $760 per share. This amounts to 9.0x pre-tax earnings and 11.4x after-tax earnings. This is a 24% discount to AutoZone's 15-year median after-tax multiple of 15.0x.

Careful readers will notice we often buy businesses for about ten times pre-tax earnings. And we tend to think of 10x as a long-term valuation floor: i.e. a growing business should be worth at least 10x.

The obvious question is, why?

Twice per year we write clients a letter to explain what they own and why they own it. Today we published our Spring 2020 letter, which you can read by clicking here or visiting the Letters section of our website.

They say generals are always fighting the last war, but it is equally true of investors. This month banks were sold indiscriminately as memories of 2008 resurfaced. Michael Mauboussin calls this the “Man Overboard Moment” and suggests it is a good time to revisit assumptions. We agree, and decided to take the opportunity to write up our thesis.

In June 1944 General Eisenhower marched into a conference room at army HQ in Malta. A ring of ashen faces stared from around the table.

Verisign is a company you rely on every day. Without Verisign, you wouldn't be reading this, or much else on the internet.

On Wednesday, McKesson initiated an offer to exchange $107.53 of Change Healthcare (NASDAQ:CHNG) shares for every $100 of McKesson (NYSE: MCK) shares tendered.

Odd lot arbitrage is what we call special situations where we can buy up to 99 shares on the open market and tender them for a profit. These situations aren't risk free, but have a high probability of success and tend to offer high internal rates of return.

NortonLifeLock, formly known as Symantec, has undergone a lot of change in the last quarter. These changes look poised to create significant long-term value. But the market has yet to react, we think because it is confused by all of the moving parts.

Pershing Square Holdings (PSH) is a closed-end fund run by famed value investor Bill Ackman. Mr. Ackman has compounded capital at 14%, net of fees, since 2004 using a concentrated long-equity strategy similar to Eagle Point’s. Right now, PSH is trading at a 25% discount to its net asset value.