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Latest Write-ups, Our ALA Excursion and Apple

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— Latest Write-ups, Our ALA Excursion and Apple  —  Find links to our latest research in this note. Value Trap continues to gain traction in the public domain. We’ll talk Apple and let you know what we’re watching after the close January 29. — Hi everyone, — We’re back from a three-day retreat at the American Library Association (ALA) Midwinter conference, and I must say I was mighty impressed with the response we received from sharing Value Trap. We handed out copies to librarians around the country, from professional to academic to public and beyond. I fully expect that Value Trap will be in most databases around the country, and I think it makes for nice exposure for advisors and industry participants that submitted a … Read more

Resetting Your Mental Model

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Image Source: affen ajlfe A version of this article was originally published on our website October 6, 2013. Having the right mental model and using the right information can be the reason why you win or lose in investing. “What is the definition of timeliness? Many believe it is getting information to investors as quickly as possible after an event, or updating something every single day or week for immaterial information. I believe in a different definition of timeliness. I believe timeliness is using all information available in a mosaic approach to accurately predict the event before it even happens. Take Kinder Morgan as the latest example. We were the only ones predicting what was going to happen before it did. To investors, … Read more

Valuentum Exclusive Success Rates Trump Even the Best Quant Hedge Funds

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Image: President of Investment Research Brian Nelson, CFA By Brian Nelson, CFA A new book, “The Man Who Solved the Market,” hit bookshelves last year, and thus far it has been a hit. The text goes into the story of quant hedge fund Renaissance Technologies and its hedge fund, the Medallion Fund, which has put up mammoth returns since inception. Though the book focuses more on the life and times of founder Jim Simons and dedicated only a page or two to the fall of Long-Term Capital Management (LTCM), another quant fund that went belly-up during the late 1990s, it was nonetheless a thoroughly interesting and enjoyable read. But why I am bringing up one of the most successful quant … Read more

Apple, Microsoft Dominated This Decade

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Apple, Microsoft Dominated This Decade     Note: Due to the New Year holiday, we will be releasing the January 2020 editions of the Dividend Growth Newsletter and High Yield Dividend Newsletter Thursday, January 2. The quarterly Financial Advisor Level publications will be released Wednesday, January 15.  — Top contributors to the S&P 500 return this decade Source: Marketwatch. Data by Andrea Riquier, through December 27, 2019*. — This article was released to members December 31. The email can be accessed here. — By Brian Nelson, CFA  — Hi everyone — hope you are doing great this New Year’s Eve!  —  Many of you haven’t had a chance to read about the performance of the Best Ideas Newsletter portfolio this year, or the performance of … Read more

2019: Another Market Beating Year for the Best Ideas Newsletter Portfolio!

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2019: Another Market Beating Year for the Best Ideas Newsletter Portfolio! — Summary: — We estimate thus far the Best Ideas Newsletter portfolio return has beat the S&P 500 by 2.8 percentage points during 2019 (34.4% versus 31.6% for the S&P 500, as measured by the SPY). — Our move to overweight Apple, Facebook, and Visa worked out wonderfully for members during 2019. We continue to overweight big winners, and we credit this to our team’s conviction in our very best ideas. —  We also made quite the savvy move in rolling over a solid gain in Chipotle (60%+) into even more shares of Apple stock during the year. We’re putting some of the best ideas right in front of … Read more

Reflecting on Two of Our Favorite Best Ideas Newsletter Portfolio Holdings

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As we get closer to finishing out 2019, let’s take a look at two of the big winners in our Best Ideas Newsletter portfolio this year: Facebook and Alphabet. What a comeback Facebook has made since the summer of 2018! On the basis of our fair value estimate, we expect the company to surpass new highs. Alphabet just hit an all-time high last month, too! By Callum Turcan Facebook Image Shown: Shares of Facebook Inc have skyrocketed over the past year as the market shrugged off near-term political/regulatory headwinds and looked out towards the future, with an eye towards Facebook’s strong free cash flow growth trajectory and pristine balance sheet. Facebook Inc (FB) is a company we’ve been pounding the … Read more

Economic Commentary: Marks, Dalio, and the Discount Rate

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Image Source: Mike Cohen We sat down with the Valuentum team to discuss their latest thoughts on recent economic developments. To kick off the conversation, let’s start with the team’s views on the latest memo from Oaktree’s Howard Marks: Mysterious. For those that don’t know Howard, he is the Director and Co-Chairman of Oaktree, which managed about $122 billion in AUM, as of September 2019. The memo goes into depth on the reasons for negative interest rates, the impact of negative interest rates, and opines on whether the US will ever see negative interest rates. Then, we’ll go from there! Brian Nelson: The concept of negative interest rates is not merely academic, but they have far-reaching implications across the global … Read more

Tech Earnings Roundup: AAPL, FB, GOOG

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By Callum Turcan Several large tech companies reported earnings this week including three of the top holdings in our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. Apple On October 30, Apple Inc (AAPL) reported fourth quarter earnings for fiscal 2019 (three month period ended September 28) that saw GAAP revenues shift higher by 2% versus the same period last year, hitting $64.0 billion. Its services revenues jumped up by 18% year-over-year while its products revenues declined by a bit over 1% year-over-year, highlighting Apple’s focus on higher margin services sales opportunities. Even so, Apple’s GAAP gross margin fell by over 30 basis points year-over-year due in part to the negative impact of the US-China trade war on top of … Read more

An Update on Facebook’s Libra as Roughly Two Dozen Members Sign On

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Image Shown: Facebook has room to run higher, with or without Libra. While several large financial technology and payment processing firms have recently made it clear they no longer want to be a part of the nascent Libra Association, that didn’t stop roughly two dozen members from signing the group’s charter in Geneva, Switzerland, on October 15. We really must stress that our discounted free cash flow models for Facebook don’t take in account the upside its proposed asset-back cryptocurrency Libra might generate. This opportunity represents pure upside to our forecasts, and we continue to like Facebook as a top holding in our Best Ideas Newsletter portfolio. By Callum Turcan Regulatory and political fears have apparently scared off several companies … Read more

ICYMI: Interview with Valuentum’s President Brian M. Nelson, CFA

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Catch up with Valuentum’s President Brian M. Nelson, CFA in a recent interview with dividend growth investor Arne Magnus Lorentzen Ulland of the blog stockles. By Brian Nelson, CFA Recently, I was interviewed by Arne Magnus Lorentzen Ulland of the blog stockles. Arne is a dividend growth investor like many of you, and I sincerely hope you enjoy the interview he put together. I’m very grateful for his interest. His questions were fantastic. We discuss why and how I incorporate independence and integrity into the service at Valuentum. We go into detail regarding why Valuentum views stocks the way it does, and how Valuentum combines enterprise valuation and the information contained in prices in its stock-selection process. I discuss the pitfalls … Read more