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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

Let’s Talk Business Analysis

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Valuentum’s Brian Nelson explains the benefits of combining both economic moat and economic castle analysis in business analysis. An excerpt from part II of Valuentum’s four-part investment education workshop. If you cannot see the video, please view the transcript below or select the link here. If you would like to purchase Valuentum’s investment education workshop, please visit the page here. Brian Nelson, CFA: “In business I look for economic castles, protected by unbreachable moats… (quoting Warren Buffett).” If you take out some of the prepositions, Warren Buffett looks for economic castles. So what we do is we provide the analysis associated with the Economic Castle rating. The Economic Castle rating is based on the academic framework that suggests that economic profit … 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

The Next Industrial Revolution – Internet of Things

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Image Source: Skyworks Summary: ·        The Internet of Things has been called ‘the next Industrial Revolution,’ and the revolution is already well underway. ·        Explosive growth can be expected in the number of devices connected to the Internet in coming years, and the data extracted from such devices will enable businesses to make significant value creating improvements to operations. ·        The proliferation of the Internet of Things will take a combined effort from the end user of the technology to smart device manufacturers to software providers to networks. ·        The newsletter portfolios have significant exposure to early large-cap adopters of the IoT. We love the potential we see in some of our favorite names to capitalize on ‘the next Industrial … Read more

Podcast: Microsoft — Still One of Our Favorites

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The Valuentum analyst team talks about the financial strength of Microsoft, its deal with LinkedIn, the possibility of a winner’s curse, its growing cloud business, and a setback with the Surface. ~6 mins. If you cannot view the video, please view the transcript below or select the link here. Tickerized for Microsoft and Salesforce. Brian Nelson, CFA This is Brian Nelson for Valuentum Securities, and today joining me is Mr. Kris Rosemann and Mr. Chris Araos. Today, we would like to talk about Microsoft (MSFT). We’ve been very very skeptical of its deal with LinkedIn (LNKD) as of late and I think to help us walk through some of our concerns but also the possible benefits of a tie-up with … 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

Microsoft With Its Head in the Clouds?

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By Kris Rosemann We couldn’t believe our eyes in mid-June after Microsoft (MSFT) agreed to acquire LinkedIn (LNKD) for more than $26 billion, “What?!?! Microsoft Acquires LinkedIn; NO!” Management must’ve had its head in the clouds. Microsoft remains a 2%+ weighting in the Dividend Growth Newsletter portfolio, more than a double since it was added at ~$26 per share December 2011. Yes, we took some profits several weeks ago (think prudent reduction of outsize exposure within a portfolio context), but we continue to be extremely happy “playing with the house’s money” (a phrase used to describe a big winner where only the raw profits remain with the principal taken “off the table”). While others were snoozing about owning Microsoft in … Read more

Oracle Remains Confident on Transition to Cloud

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Image Source: Peter Kaminski By Kris Rosemann Oracle (ORCL) is still working to transform its operations to a cloud-based business model, but it is already selling more new software as a service (SaaS) and platform as a service (PaaS) annually recurring cloud revenue than any other company in the world, including key competitors Salesforce.com (CRM) and Workday (WDAY). Oracle competes in large SaaS markets that Salesforce.com does not, such as Enterprise Resource Planning (ERP) and Human Capital Management (HCM). After many years of developing the most complete ERP suite in the cloud, Oracle Fusion ERP is the overall market leader in the enterprise cloud ERP market. The firm has more than 10 times the number of ERP customers than Workday, … Read more

The 20 Something’s Stock Portfolio

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A version of this article appeared on our website March 31, 2015. <Our best ideas at any time are included in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio.> The “20 Something’s Stock Portfolio” is the first in a series of articles where we get to the core of what many brand new investors want to do when they are first introduced to the stock market: find exciting companies that they are familiar with that will help compound their wealth over time. Other portfolios that we will share in this series include “The Ultra High Income Portfolio,” “The Economic Castle Portfolio,” “The Dividend Cushion Portfolio,” and “The Intelligent ETF Investor’s Portfolio,” among others. The series of portfolios will … Read more

Oracle’s Cloud Performance Leaves a Hazy Overall Outlook

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After reporting fourth quarter and full year results for fiscal 2015 on June 17, Oracle (ORCL) shares took a significant hit. It is easy to see the effect foreign exchange rates had on the quarterly results, but there is more to the miss than meets the eye. In the fourth quarter of fiscal 2015, Oracle reported revenue of ~$10.7 billion, a decrease of 5% as reported, or an increase of 3% on a constant currency basis. Driving the top line lower was a decrease in software and cloud revenue, more specifically new software licenses, where sales dropped 17%; new software licenses make up more than 20% of total revenue. Attempting to offset this significant drop was strong 29% growth in … Read more