“If you know how each Recording Academy member will vote, it’d be difficult to not pick the Grammy winners. If you know how each investing discipline will vote with their capital to drive the stock up or down, it’d be difficult to not pick stock winners.”
I love this time of year. It’s when Valuentum has the greatest opportunity to teach some of its core beliefs in investing. Today, Sunday, January 26, some of us will be tuning in to watch the Grammys, the premier outlet for honoring achievements in the recording arts. What most of us don’t know, however, is that the skills of an onlooker consistently picking the winners of a Grammy are, in substance, similar to the skills of a stock-picker consistently selecting a winning stock. Both are focused on what matters and throw their personal opinions aside.
To win an office Grammy pool, for example, the winner doesn’t pick the nominee he/she thinks should win, but instead picks the nominee that he/she thinks Recording Academy members, or those that determine the winner, would vote for. Just like an onlooker can do little to influence the outcome of the Grammys with his or her opinion, a small individual investor can do little to move the price of a stock via buying or selling (it takes large amounts of money to drive a stock’s price up or down). Only large institutional money managers have the capital to truly move stocks up or down to intrinsic value. To pick a Grammy winner, we have to know as much about the preferences of the Recording Academy members as we actually have to know about the nominees themselves. To pick a winning stock, we have to know as much about the viewpoints of those that have a large impact on driving the stock price up or down, spanning from value to momentum investors and other styles in between (namely income, growth, GARP, etc.), as we do about the companies/stocks themselves.
At Valuentum, we’re ‘standing on the shoulders of giants’ with the innovative and evolutionary process, the Valuentum Buying Index. We can see further than any other investor. We embrace the schools of thought of those that move the market, from value through momentum (and everything in between) because without an understanding of how the markets work, we know that investors don’t have a chance of consistently winning. No matter how badly you may want a nominee (stock) to win for this reason or that reason, it really only matters what Recording Academy members (money managers) think of the nominee (stock). In stock market parlance, we at Valuentum think the best opportunities arise from a complete understanding of all investing disciplines in order to identify the most attractive stocks at any given time.
This means we do the deepest of dives across a large variety of disciplines, from value through momentum, to find Valuentum stocks—stocks that are poised to win. Said differently, if you know how each Recording Academy member will vote, it’d be difficult to not pick the Grammy winners. If you know how each investing discipline will vote with their capital to drive the stock up or down, it’d be difficult to not pick stock winners. That’s the Valuentum investing belief system at its core. No other research firm is doing this on a systematic basis!
Please click here to continue reading: The 13 Most Important Steps to Understand the Stock Market
