Video: 2022 was a successful year by almost every measure from the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio to the simulated High Yield Dividend Newsletter portfolio and Exclusive publication and beyond. There were some disappointments in 2022, of course, but the year showed the value of a Valuentum membership. Join President of Investment Research Brian Nelson on this year's Exclusive conference call to learn what to expect from Valuentum in 2023. Cheers!

Transcript

President of Investment Research Brian Nelson:

Happy Holidays everyone! I hope that you are enjoying this special time of year with family and friends, and I wish you all a wonderful 2023!

I just wanted to take a few minutes to recap what 2022 looked like at Valuentum.

In the year, we published 60 monthly newsletters (6-0), nearly 300 in-depth articles on our website, 120 articles on Seeking Alpha, and we reached a new high in followers on that platform.

During 2022, we updated hundreds of stock and dividend reports and monitored four simulated newsletter portfolios across our publishing suite, while we released three new Exclusive ideas each month and four new option idea considerations each month this year. We have two more new option ideas to release in December before closing the books on 2022.

With each simulated newsletter portfolio including approximately 20 ideas each, and including the 36 new ideas released in the Exclusive during 2022, that means readers had access to well over 100 of our best ideas this year, in addition to the 48 new option idea considerations released by email through a membership to our additional options commentary.

As of our latest measurement on December 4, [year-to-date] the simulated Best Ideas Newsletter portfolio was beating the S&P 500, as measured by the SPY, the simulated Dividend Growth Newsletter portfolio was positive on the year -- and this excludes hypothetical dividends received – the simulated High Yield Dividend Newsletter was roughly flat after consideration of hypothetical dividends, and the success rates of the Exclusive publication continue to be phenomenal.

Through November 8, success rates with respect to capital appreciation ideas in the Exclusive publication were 85.5% (65 out of 76), while success rates for short-idea considerations were 92% (70 out of 76). A 92% success rate for short-idea considerations since inception of the publication is simply unbelievable, and I encourage everyone to consider a membership to the Exclusive publication.

But these successes in 2022 cannot simply be looked at in isolation.

For starters, 2022 has been one of the worst years for the 60/40 stock/bond portfolio in decades, if not a century, and many interest-rate-sensitive high-yielders north of 9%-10% have plummeted considerably this year, perhaps never to return to their glory days again.

With the financial wreckage all around us -- not the least of which has been in REITs, mREITs, disruptive innovation stocks, and cryptocurrencies -- the year 2022, while a difficult one, has shown just how valuable a Valuentum subscription has been for members.

At Valuentum, we use the Valuentum Buying Index to source ideas into diversified simulated newsletter portfolios, and the VBI may be most applicable to the simulated Best Ideas Newsletter portfolio, where we generally like to include ideas when they register a high VBI rating and remove them when they register a low VBI rating.

The goal of the simulated Best Ideas Newsletter portfolio continues to be to highlight ideas with strong long-term capital appreciation potential, in our view.

We always use the VBI in a portfolio setting and never by itself. But what about the Valuentum Buying Index ratings, themselves? How did they “perform” during 2022 in one of the worst years for stock market investors, more generally?

Based on the preliminary estimated return of the high-rated bucket (6 through 10; 10=best) versus the low-rated bucket (1 through 5), as measured from the Stock Screener, released January 15, 2022, through the one released October 15, 2022, the 6 through 10 rated bucket (the good bucket) outperformed the 1 through 5 bucket (the poor bucket) by approximately 1.8 percentage points and the S&P 500 by approximately 4.1 percentage points, exclusive of hypothetical dividends.

Not as impressive as we would have liked, but not bad either. The next quarterly Stock Screener will be released January 15.

The Dividend Cushion ratio also showcased its uniqueness this year when it flagged Lumen Tech for being at a high risk of a dividend cut despite both the company’s dividend payout ratio and free cash flow coverage of the dividend suggesting it was safe. Unlike other measures, the Dividend Cushion ratio places considerable emphasis on balance sheet health, and this is an area of analysis that continues to differentiate our research from others’.

By almost every measure 2022 was a successful year.

But that said, we unfortunately did have some high-profile setbacks. First, two of our very favorite ideas in the simulated Best Ideas Newsletter portfolio, Meta Platforms and PayPal, soured considerably during 2022, and while other ideas such as Exxon Mobil, Chevron, and Vertex Pharma helped to offset the weakness, it’s disappointing to see such high-profile ideas not work out.

At the start of this year, we also had the view that large cap growth and big cap tech would continue to power through in 2022, and while the area of large cap growth continues to outperform small cap value by a sizable margin over the past 5 years, 2022 ran counter to this trend, unfortunately.

We were also caught by surprise, as with most of the market this year, with the pace of rate hikes by the Fed as a result of inflationary pressures, which at the beginning of this year, we thought would actually be a positive catalyst for share-prices as they were during 2021.

This, unfortunately, was not the case as consumer budgets were squeezed too much while asset values from crypto to equities to the 60/40 stock/bond portfolio plummeted around them. Not only did a higher discount rate hurt equity values and bond prices throughout the year, but corporate earnings growth faced considerable pressure as consumer spending power weakened.

As we usher in 2023, we have a few exciting enhancements to announce. First, to make things easier for members, we will now be including the strengths and weaknesses of a company’s dividend on page 2 of the 16-page report. This will make it easy to access dividend information in the 16-page report, itself. We’ll continue to publish the supplementary dividend report that contains the Dividend Cushion ratio, too.

Second, it has become clear the past several years at Valuentum that our members are thirsty for more and more newsletters and newsletter content. We’ve expanded beyond the Best Ideas Newsletter and Dividend Growth Newsletter to include the Exclusive publication in 2016, the High Yield Dividend Newsletter in 2018, and the ESG Newsletter in 2021. We also released additional options commentary in 2020. We’re happy to do so.

As we continue to focus on member demand for more newsletters and newsletter content and on analytical quality over quantity, there are always tradeoffs. Going forward, the number of companies of which we will provide stock and dividend reports will change to approximately 200-300, give or take, updated periodically every 3-12 months, depending on member requests and market conditions.

We believe that this is the sweet spot for the number of reports and the update cycle for the reports on our website, and we’ll continue to write commentary and perform financial analysis on many, many more companies, too – just not in report format. Please be sure to visit the stock website pages on companies of interest, as we publish online commentary and updates there that’s not included in the stock and dividend reports.

During 2022, we also added new payment functionality at Valuentum. For security reasons, we don’t ever take your credit card number by email or over the phone, and in the past, we have generally used PayPal to process our transactions. However, you can now use your credit card to process your membership via Square.

Our policy is privacy and security first, and either PayPal or Square can process your membership via credit card transaction through our website or by invoice via email.

Now let’s talk the markets.

Everybody, today, has become a macro analyst, so I won’t be making any big predictions about inflation or GDP on this call. However, I do believe that the markets remain locked in a technical downtrend that may cause the broader S&P 500 to bottom at approximately 3,400 in 2023.

Though this is our bird’s eye view and one fraught with risk and likely to change, the view won’t alter what we’re doing in the newsletter portfolios and with respect to incremental Exclusive idea and option idea generation. Our best ideas always are included in the simulated newsletter portfolios, and Exclusive publication, as well as with our additional options commentary.

With all of this said, I want to thank you personally for your continued interest in and support of what we’re doing at Valuentum. I believe we have an unmatched newsletter subscription suite, top-of-the-line research and analytics, among the most innovative forward-looking stock-selection and dividend growth methodologies, and a fantastic track record across valuation and dividend growth analysis for more than a decade.

Thank you, and God bless all of you! Here’s to a fantastic 2023! Cheers!

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About Our Name

But how, you will ask, does one decide what [stocks are] "attractive"? Most analysts feel they must choose between two approaches customarily thought to be in opposition: "value" and "growth,"...We view that as fuzzy thinking...Growth is always a component of value [and] the very term "value investing" is redundant.

                         -- Warren Buffett, Berkshire Hathaway annual report, 1992  

At Valuentum, we take Buffett's thoughts one step further. We think the best opportunities arise from an understanding of a variety of investing disciplines in order to identify the most attractive stocks at any given time. Valuentum therefore analyzes each stock across a wide spectrum of philosophies, from deep value through momentum investing. And a combination of the two approaches found on each side of the spectrum (value/momentum) in a name couldn't be more representative of what our analysts do here; hence, we're called Valuentum.

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Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson's household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the other securities written about in this article may be included in Valuentum's simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.

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