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The “Luck” and “Randomness” of Index Funds

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Please select the image below to download the document. Image shown, page 1 of 14. Tickerized for Valuentum’s coverage universe.

Dividend Increases/Decreases for the Week Ending January 26

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Below we provide a list of firms that raised/lowered their dividends during the week ending January 26. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week 3M (MMM): now $1.36 per share quarterly dividend, was $1.17. AGCO (AGCO): now $0.15 per share quarterly dividend, was $0.14. Air Products and Chemicals (APD): now $1.10 per share quarterly dividend, was $0.95. Alaska Air (ALK): now $0.32 per share quarterly dividend, was $0.30. ALLETE (ALE): now $0.56 per share quarterly dividend, was $0.535. Alliance Data Systems (ADS): now $0.57 per share quarterly dividend, was $0.52. … Read more

Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value

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President of Investment Research Brian Nelson defines the concept of universal value and shows how quantitative statistical methods are inextricably linked to those of fundamental, financial, business-model related analysis. Value does not exist in respective process vacuums! Value is universal. Find out why. Running time: ~10 minutes.  Tickerized for Valuentum’s stock and ETF coverage universe. Transcript Hi this is Brian Nelson from Valuentum Securities, and this is the tenth edition of a series that I call “Off the Cuff,” where I get in front of the camera and I talk for ten minutes. This is what we have to talk about today. We have to talk about this concept: The Theory of Universal Value. Value does not exist in vacuums … Read more

AT&T’s 5% Dividend Yield: Is It Sustainable?

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Image Source: Mike Mozart The question on everyone’s minds: Is AT&T’s dividend sustainable? By Brian Nelson, CFA AT&T (T) has been on a spending spree. Its agreement to acquire Time Warner (TWX), the merger with DirecTV, and wireless acquisitions in Mexico are just a few tie-ups the company has pursued in recent years. Regardless of what you think about the incremental financial risk associated with a larger balance sheet, AT&T has increased its quarterly dividend for 30+ consecutive years and has frequently returned $20+ billion to shareholders annually through dividends and share buybacks. The company’s Dividend Cushion ratio is 0 (which isn’t great), but let’s put some color around that number. Per AT&T’s dividend report: Key Strengths AT&T has paid … Read more

Discovery-Scripps Joining Forces to Take on the Changing Digital Media Landscape

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Image Source: Lwp Kommunikáció Discovery Communications has agreed to acquire Scripps Networks, but will it be enough for the two to remain competitive in the rapidly evolving–and consolidating–media landscape? By Kris Rosemann The cable TV industry is not what it was only a few short years ago, and Discovery Communications (DISCA) finally getting its hands on the assets of Scripps Networks (SNI) is only further evidence of this. Both companies have had a relative amount of success in delivering compelling programming to targeted audiences in years past via traditional pay-TV channels, but the days of tuning in to Shark Week on The Discovery Channel through your local cable provider are fading fast. The cord-cutting revolution is one that has been well-covered … Read more

Labor and the Economic Cycle

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As we arguably near the “peak” in the business cycle, labor is starting to demand more, a dynamic that we believe is emblematic of the period of aging economic expansion. Let’s have a look at what’s happening in the fight for higher wages. By Brian Nelson, CFA Each business cycle is different in both magnitude and duration, but there are some common qualities that define where an economy might be within the cycle. First, it has been more than 8 years since the March 2009 stock-market panic bottom, a period that witnessed firms such as Lehman Brothers, Bear Stearns, and AIG (AIG) flounder. The unemployment rate peaked at 10% during that difficult time. Since then, the US economy has emerged … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

Image: Returns Following the Trump Victory

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To download the table for easier viewing, please select the link . Financials: Trump’s Treasury Secretary choice Steven Mnuchin wants to repeal most of the burdensome Dodd-Frank legislation. A steepening yield curve is helping banks and may drive improved net interest margins in coming periods. Goldman Sachs is ripping higher, leading the Dow’s charge.   Crude Oil: The world is moving to a better balance in supply/demand dynamics in the energy markets. OPEC is talking, has agreed to cuts, and expectations for improved economic growth are helping energy resource pricing. High-beta companies such as Continental Resources are rallying hard.   Energy: Capital spending cuts are bolstering free cash flow in the upstream space as energy resource pricing improves. Reduced regulations could help … Read more

The “Uninvestable” Twitter and Netflix Buoyed By Takeout Chatter

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By Kris Rosemann and Brian Nelson, CFA At Valuentum, we like slam-dunk, no-brainer investment opportunities–like Microsoft (MSFT) in the mid-$20s before it doubled, or Visa (V) prior to its strong equity price performance in recent years, or even cigarette-maker Altria (MO) in advance of its ongoing march higher since the dawn of the release of the inaugural Best Ideas Newsletter. Our members count on us to use our knowledge of valuation to sort out “investable” stocks from “uninvestable” ones; good stocks with fundamental promise from bad ones built on fantasy outcomes. Benjamin Graham calls what we do “investing,” while he may call readers that dabble in the two highlighted stocks in this piece “speculators.” There is a difference, and it’s … Read more