LUV

Berkshire Reports 2019 Earnings

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By Callum Turcan Berkshire Hathaway Inc (BRK.A) (BRK.B) reported fourth quarter and full-year results on Saturday February 22, and we appreciate the firm’s performance across most of its business lines, keeping in mind that losses at its insurance-underwriting business during the fourth quarter weakened its company-wide performance. That being said, the insurance business can be volatile at times, which is why we appreciate Berkshire’s large railroad, utility, consumer goods, and other business segments. On the topic of Berkshire’s insurance-related exposure to the ongoing COVID-19 epidemic (which has since spread from China (FXI, MCHI, KWEB) to the rest of the world, shutting down economies in South Korea (EWY), Italy (EWI), and elsewhere), insurance firms fundamentally altered the structure of their policies after the … Read more

ALERT: Adding Market Crash ‘Protection,’ Removing MSFT, BKNG

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Image source: Centers for Disease Control and Prevention.  ALERT: Adding Market Crash ‘Protection,’ Removing MSFT, BKNG — Changes to newsletter portfolios — We’re adding out-of-the-money put options to both the Dividend Growth Newsletter portfolio and Best Ideas Newsletter portfolio. — We’re removing Microsoft from the Dividend Growth Newsletter portfolio. — We’re removing Booking Holdings from the Best Ideas Newsletter portfolio. — By Brian Nelson, CFA — We’re making some moves in the newsletter portfolios today.  — The Dow Jones Industrial Average (DIA) is currently indicated down 900+ points in pre-market trading during the session Monday, February 24. We laid out a thesis where the US markets could experience a “crash,” and we encourage you to read that take here, “Is a … Read more

Is a Stock Market Crash Coming? — Coronavirus Update and P/E Ratios

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Image Source: World Health Organization, Coronavirus disease 2019 (COVID-19), Situation Report — 32 We don’t think this is the environment to put new capital to work, and we remain highly cautious of what COVID-19 means for global economic growth not just in the first quarter of 2020 but for the rest of this year (maybe longer). Right now, the US markets are not really factoring in anything related to COVID-19, and perhaps may be adjusting to China’s stimulus in artificially propping up the markets as if the outbreak is somehow a “positive thing.” With the S&P 500 trading at 19.0 forward earnings estimates–estimates that are likely too high given the evidence we are seeing with respect to a slowdown due … Read more

Why *NOW* Do You Care About Boeing’s Stock?

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Image Source: Robert Sullivan In no, way shape or form should you *now* be interested in Boeing’s stock. Let’s explain. By Brian Nelson, CFA I used to cover Boeing (BA) full-time when I worked as a senior equity analyst at Morningstar many moons ago. I remember pounding the table on the name to many a buyside shop in Chicago when it must have been trading well under $100 at the time (now more than 10 years ago). I remember posting an old video of me with Pat Dorsey, who now runs his own shop in Chicago, Dorsey Asset Management. That video used to be here, but as in what usually happens on the Internet, the darn thing doesn’t exist anymore. … 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

Improving Our Coverage

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Valuentum continues to scour the stock market for new ideas. We’ll be following the set of companies in this list via commentary on our website and a data sheet updated periodically. By Valuentum Analysts The list of companies in the download below were previously covered by our team via 16-page report and dividend report fashion. Going forward, we are now covering these companies with commentary on the website and via a data sheet updated periodically. This will be a much better use of members’ time, especially as members scour our Best Ideas Newsletter, Dividend Growth Newsletter, stock methodology, dividend methodology, and the hundreds of stock valuation reports and dividend reports on our website, available through the Symbol search box.  We … 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

Fair Value Estimates Matter – Case Study: Boeing

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Image Source: Boeing’s share price converged to our estimate of intrinsic value in the summer of 2019. The plane maker continues to navigate tumultuous skies with its 737 MAX. By Brian Nelson, CFA Dow Jones Industrial Average component Boeing (BA) continues to dominate news headlines, and not for good reason. Let’s revisit our March 2019 article for some background: The news for Boeing hasn’t been this bad since the doldrums of the 787 Dreamliner build some years ago now. The 737 narrowbody, the line-up all over the news of late, is the workhorse of the industry, and Boeing’s next generation 737 MAX has been the fastest-selling plane in the aerospace giant’s history. Most countries around the globe, including the US, … Read more

Google, Intel — Yes!

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Google, Intel — Yes! — Let’s talk Google and Intel, remind you that we’ve removed Chipotle, Xilinx, and Boeing from the newsletter portfolios some time ago. I’ll talk a little about PayPal’s run higher and address some other themes, including contingent liabilities with J&J and 3M. — By Brian Nelson, CFA — We don’t get everything right, of course, but lately, we’ve been really doing a great job getting the right ideas in front of you! I’m super proud of our team at Valuentum, and I hope that you are capitalizing on our research. — In a prior article, I talked about how Facebook (FB) and Visa (V), two top-weighted ideas in the Best Ideas Newsletter portfolio, were on fire … Read more