Welcome to the Vancouver Value Investing Group!

1. Welcome to the Vancouver Value Investing Group! • Objectives of the Group: • LEARN strategies for making profitable investments. • DISCOVER quality public investment opportunities. • NETWORK with local investors and share experiences. • The central idea of value investing is to view stocks as part-ownership in a business instead of pieces of paper to be casually traded. • Finding the intrinsic value of investments using both quantitative and qualitative methods. • Staying away from charting, market timing, short-term trading, rumors, speculative ideas, and IPO’s. • The philosophy of the group is to have an attitude of opportunity tempered by a healthy dose of skepticism and critical analysis. • “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.” • Don’t be afraid to speak your mind, especially if you have a different point of view. • The quality of each meet-up depends upon your participation so share your passion for investing with others!

2. Bruce Greenwald of Columbia University introduces the central ideas of Value Investing (5 minutes) Jason Zweig talks with Consuelo Mack of WealthTrack on common mistakes investors make. (13 minutes @ 1.24 min)

3. The Truth about Peak Oil and our Energy Future. By Nawar Alsaadi, Founder of the Actionable Intelligence Investment Club

4. TravelCenters of America LLC (AMEX: TA) Market Cap when purchased in mid August: $43 million ($2.6/share)

5. Typical Property Profile • Showers and restrooms featuring marble tile and Corian countertops, brilliantly lit mirrors • Locations situated close to highway entrances and exits • Branded gasoline and diesel fuel • Open 24 hours a day, seven days a week • A "to go" snack bar area with coffee, cappuccino, sodas, hot dogs, bakery products, sandwiches and salads • A large, fully stocked travel store with an "Odd Town, U.S.A." theme - neon lights and lighthearted signage featuring real towns such as Sweet, Idaho and Salty,Texas, that guide customers through the shopping experience • Fast food courts - typically featuring two to three branded fast food restaurants • Full-service restaurant - offering 24-hour table service and buffet dining options from one of three distinct network restaurants • Ample, well-lit parking areas • Game room • Separate driver and motorist entrances • For the Professional Drivers • 24-hour truck repair and maintenance service • In-cab conveniences such as phone service, Internet access, cable TV • Comfortable, spacious drivers` lounge 11,900 Employees 233 combined sites. 185 sites owned and leased from Hospitality PropertiesTrust and operated by TA. 9 company owned + 8 company owned land parcels for future development.

6. NOTE: $22/share book value. Vs $3.4/share market price = Selling for 15 cents on the dollar. $7.32/share in net cash deducting cash for deferred rent.

7. NOTES: $54 million - $32 million (deferred rent) = $22.4 million - $13 million cap ex = $9.4 million liquidity after change in working capital. Assume working capital is unchanged from 12/31/08 = 9.4 million - 20 million (working capital removal) = (11) million for first half 2009. $5 million investment is a 16.7% interest in a new insurance venture. CEO says to offset some losses and also save on some insurance costs of TA’s business. Bottom Line: TA may not be profitable yet, but it has more than amble liquidity.

8. Some considerations… • Fuel gross margin per gallon has increased from 7.5 cents in 2006 to 13 cents over the last 2 years. They keep low inventory on diesel. Problem is lower volumes and other costs due to recession. • Non-Fuel gross margin / gallon has increased from $0.30 to $0.36 over the last 2 years. • TA is not recording a deferred tax asset. • Thesis: TA non-fuel margins should increase with a recovery from the recession. It would only take a 10% increase in non-fuel margin with fuel margin being constant for the company show a net profit and Free Cash Flow. • A fast increase in oil prices is a risk. It means lower non-fuel spending and more competition with non-trucking transportation. • TA has more fixed than variable costs, as such it cannot cut costs fast enough in the recession. • TA does not own its real estate and must rent it from HRPT Property Trust. The rent is quite high given the recession (~$200 million per year). They are deferring $60 million of rent/yr (but booking it as a liability) so it has no effect on cash-flow. In 2010, they must pay 12% interest, and in 2011 must pay all the deferred rent.

9. Summary • Source ideas from others, TA came from looking at a 13-F filing (which shows public stock positions held within other public companies), not from a screen. • Eliminate the catastrophe risk. TA has amble cash and liquidity to whether a prolonged recession, with a wide margin of safety. • An undervalued stock should “scream out” at you– TA has a market cap of $55 million against shareholder equity of $369 million. More than $55 million of this equity is in cash. • When in doubt about a management, bet on the business – I do not have enough information on the management, except quarterly transcripts where the CEO says he doesn’t like the “red ink”. However, they also started a new insurance business. I am betting that the economy will dictate TA’s margins, not management’s skill. • Any stock whose ownership has a ‘control group’ should give an investor some concern– TA has a balanced ownership profile, without any >10% owner. It also has change of control/takeover provisions that are very anti-control. Mental Models – “You’ve got to have models in your head and you’ve got to array your experience – both vicarious and direct – onto this latticework of mental models.” – Charlie Munger • Source ideas from others, especially those you admire and trust. Investment is a field where ego doesn’t necessarily make you more money. • #1 Question when considering an investment – eliminate the catastrophe risk. Debt and liquidity is a big cause of catastrophes. • An undervalued stock should “scream out” at you and not require a calculator to be obvious. If you are using spreadsheets and doing calculus, you are seeking a false precision and probably working too hard! • When in doubt about a management, bet on the business (i.e. a recession causes the tide to go out for all boats, conversely a recovery raises all boats, you can bet on things outside of management control or things within management control, and management is notoriously difficult to evaluate). • Any stock whose ownership has a ‘control group’ should give an investor some concern with respect to realizing the value of their investment in a reasonable time frame, unless that group shows some sort of special brilliance. • Have a long term perspective – quarterly results are largely meaningless and random. The media has an anti-investment bias. Remember to get the extraordinary return of 20% per year, your investment can take 3.5 years to double. There is a difference between being lucky and doing the right thing.