Valuentum Exclusive Analysis for the Discerning Investor

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Aug 27, 2022

Video: We Expect A Huge Market Flush! Looking to "Raise" Incremental Cash
Video: Valuentum's Brian Nelson, CFA, breaks down the current market environment, highlighting reasons for the poor market sentiment driven by "tapped out" consumers and investors alike. He expects a big market "flush," and a challenging next couple years but remains a big fan of stocks for the long haul. Valuentum continues to seek to "raise" incremental cash in the simulated newsletter portfolios as it prepares to weather the storm. Video length: ~10 minutes.

Aug 19, 2022

Nelson: The 16 Most Important Steps To Understand The Stock Market
Image Source: Tim Green. We outline the '16 Most Important Steps to Understand the Stock Market.' We think it's important to take a read of these key stock market tenets when things are going great -- and perhaps even more important when things aren't going your way. This continues to be a working document.

Aug 10, 2022

Best Idea Berkshire Hathaway Continues to Impress
Image Shown: Berkshire Hathaway Inc is a stellar cash flow generator in almost any operating environment. Image Source: Berkshire Hathaway Inc – 10-Q SEC filing covering the Second Quarter of 2022. Berkshire Hathaway Inc reported second quarter 2022 earnings that saw its ‘operating earnings’ metric surge higher versus the year-ago level. This metric removes realized and unrealized gains/losses in its large equity portfolio from the picture to provide investors with a better understanding of the company’s underlying performance. Due to the downturn in equity markets seen during the first half of this year, Berkshire Hathaway’s GAAP net income swung to a large net loss last quarter. We include shares of Berkshire Hathaway Class B (ticker: BRK.B) in the Best Ideas Newsletter portfolio, and our fair value estimate sits at $320 per share with room for upside.

Jul 11, 2022

Valuentum's Unmatched Product Suite
We continue to be huge believers in the concept of enterprise valuation, which emphasizes the key cash-based sources of intrinsic value--net cash on the balance sheet and strong and growing future expected free cash flows. Meta Platforms, Inc. and Alphabet Inc. remain two of the most underpriced ideas on the market today, and we remain huge fans of their tremendous long-term investment prospects.

Jul 4, 2022

Nelson: I Have Been Wrong About the Prospect of Near-Term Inflationary-Driven Earnings Tailwinds
"Though I have been clearly wrong on my near-term thesis for inflation-driven earnings expansion, we still did great sorting through investment idea considerations. Through late June, for example, the simulated Best Ideas Newsletter portfolio has generated 4-5 percentage points of alpha relative to the S&P 500, as measured by the SPY. The simulated Dividend Growth Newsletter portfolio is down only modestly this year, also performing better than traditional benchmarks. The simulated High Yield Dividend Newsletter is generating “alpha” against comparable benchmarks, and the Exclusive publication continues to deliver, with both capital appreciation ideas and short idea considerations generating fantastic success rates. ESG and options-idea generation have also been great. With all this being said, in the long run, I believe nominal earnings will expand rapidly from 2021 levels, which is why I remain bullish on stocks. I believe markets tend to overestimate earnings in the near term and underestimate them in the long run. The intelligent investor knows, too, that the most money is made during recessions and bear markets, where steady reinvestment and dollar cost averaging help to better position portfolios for higher returns over the longer run. The newsletter portfolios are well-positioned for continued “outperformance,” in our view, and while we may make a few tweaks to them, we’re not making any material changes at this time."

Jan 22, 2022

Don’t Throw the Baby Out with the Bathwater
Image: Erica Nicol. Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor may be doing much worse. Our timing to exit some very speculative ideas in the Exclusive publication has been impeccable. Beware of “best-fitted” backtest data regarding sequence of return risks. Research is to help you navigate the future, not the past. We remain bullish on stocks for the long haul and grow more and more excited as our simulated newsletter portfolios continue to hold up very well. Don’t throw the baby out with the bath water. Stick with the largest, strongest growth names. We still like large cap growth and big cap tech, though we are tactical overweight in the largest energy stocks (e.g. XOM, CVX, XLE). The latest short idea in the Exclusive publication has collapsed aggressively since highlight January 9, and we remain encouraged by the resilience of ideas in the High Yield Dividend Newsletter portfolio and ESG Newsletter portfolio. Our options idea generation remains ongoing.

Jan 11, 2022

Raising Our Fair Value Estimate on Berkshire Hathaway, Our Thoughts on the Insurance Industry
Image Source: AIG. Shares of the SPDR S&P Insurance ETF (KIE) have trailed the performance of the S&P 500 (SPY) during the past 15 years. Our favorite insurer remains Berkshire Hathaway (BRK.B), and we recently raised our fair value estimate of its B shares to $320, as of the latest update (effective January 12, 2022). The high end of our fair value estimate range for Berkshire Hathaway is $384 per share. Berkshire Hathaway is included in the simulated Best Ideas Newsletter portfolio as of this writing. American International Group (AIG) serves as an important cautionary tale of what could happen to an insurer that doesn't manage its risks effectively, and we wouldn't expect to add any pure-play insurer to the simulated Best Ideas Newsletter portfolio.

Dec 26, 2021

VIDEO/TRANSCRIPT: 2021 Valuentum Exclusive Call: Inflation Is Good
Valuentum's President Brian Michael Nelson, CFA, explains why investors should not fear inflation, why government agencies such as the Fed and Treasury are prioritizing something other than price discovery, why the 10-year Treasury rate is a must-watch metric, and why Valuentum prefers the moaty constituents in large cap growth due to their net cash rich balance sheets, tremendous free cash flow generating potential, and secular growth tailwinds.

Nov 12, 2021

Hard Work and the Trust That Binds
Image: Terry Johnson. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April 29, 2020, “ALERT: Going to “Fully Invested” – The Fed and Treasury Have Your Back,” when we saw the writing was on the wall for this blow off top. If nothing else, these three moves alone during the past couple years have paid for a lifetime of subscriptions.

Nov 9, 2021

Best Idea Berkshire Hathaway Moving Higher!
Image Shown: Shares of Berkshire Hathaway Inc Class B have been on a nice upward climb over the past year. On November 6, the industrial and insurance conglomerate Berkshire Hathaway Inc (BRK.A) (BRK.B) reported third-quarter 2021 earnings. We liked what we saw in its latest earnings update as most of its business segments reported strong results, save for some of its insurance businesses which took a hit from major weather events and headwinds resulting from more drivers being on the road. Shares of Berkshire Hathaway Class B (ticker: BRK.B) are included as an idea in the Best Ideas Newsletter portfolio.