RIOT

Market Whipsaw: Crypto Collapse and a Lower-than-Expected Inflation Print

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Image: Uncertainty in the cryptocurrency markets has surged with concerns over the liquidity of a key exchange. Investors are weighing the spillover effects of crypto with the view that the pace of inflation may have peaked. — By Brian Nelson, CFA — The U.S. equity market continues to be highly volatile as it whipsaws between concerns over the health and sustainability of cryptocurrency and optimism over lower-than-feared inflation readings. We maintain our bearish/defensive stance on equities, but at the same time, we continue to be “fully-invested” across the simulated newsletter portfolios in part because we don’t want to miss out on days like today, November 10, when the markets are soaring ~2.5%-5.5% depending on which index you are monitoring. We’re also … Read more

Valuentum Weekly: Outsized Energy Exposure Continues to Buoy Newsletter Portfolios

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Image: Light crude oil futures once traded for roughly -$40 (negative $40) during the COVID-19 crisis, but have now rocketed to more than $120 in recent trading. Image Source: TradingView. This note was emailed to members Sunday, March 6, 2022. Markets   The S&P 500, as measured by the SPY, is down 9% year-to-date, a modest pullback, in our view, particularly in light of the fantastic performance the past few years. Though not necessarily welcome, a down year every now and then for the broader market indexes and a modest bear market can only be expected, at times. The Dow Jones Industrial Average, as measured by the DIA, is down more than 7% year-to-date (not too bad), while the Nasdaq–as measured by the … Read more

Hut 8 Mining Is an Interesting Play on Cryptocurrencies

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Image Source: Hut 8 Mining Corporation – November 2021 IR Presentation By Callum Turcan Hut 8 Mining Corporation (HUT) is headquartered in Toronto, Canada (in the province of Ontario), and “mines” digital assets from two operations in Alberta, Canada (in the city of Medicine Hat and town of Drumheller). The firm is in the process of developing a third mining operation in Ontario, Canada, at the small city of North Bay, having secured a long-term power purchase agreement with Validus Power Corp. Overview  Though Hut 8 Mining mines for both bitcoin (BITO) and ether, two of the most popular cryptocurrencies, when it mines for Ether it historically has preferred to get paid in bitcoin. Hut 8 Mining has built up … Read more

How to Navigate the Low Return Environment

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Image Shown: Investors continue to gamble on meme stocks and cryptocurrencies. Image Source: QuoteInspector.com.  Modern Finance Is Dead, Long Live Value Trap By Brian Nelson, CFA At Valuentum, we don’t believe in many of the quantitative theories out there. We like to operate within the stock component of market returns, as this has historically been the strongest place to focus one’s efforts. We don’t think it makes sense to add “bad” assets to a portfolio just for the sake of diversification. Can you imagine adding pipeline MLPs to your portfolio in June 2015? If we can find great ideas within the stronger relatively performing stock market, we think we’ll be far better off than any stock/bond mix that one may choose. … Read more

Stock Markets Still Healthy, Big Cap Tech and Large Cap Growth Safe Havens

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Image Shown: The S&P 500 has been trading above our fair value estimate range (shaded blue area) for some time now. A modest sell-off should be expected. We continue to be bullish on equities for the long run and point to the areas of big cap tech and large cap growth as sources of fundamental and financial resiliency. By Brian Nelson, CFA The S&P 500 (SPY), chart shown above, is trading above our fair value estimate range. The recent sell-off should not be surprising, and it has been predominant in speculative free-cash-flow burning technology stocks, of which we tend to avoid. In January of this year, we “raised” 10%-20% cash in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter … Read more

PayPal Expects to Double Its Annual Free Cash Flows By 2025

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Image Shown: PayPal Holdings Inc views its total addressable market across the payment processing and solutions sitting at approximately $110 trillion, an enormous opportunity that the firm is well-positioned to capitalize on. Image Source: PayPal Holdings Inc – 2021 Investor Day Presentation By Callum Turcan We continue to be huge fans of PayPal Holdings Inc (PYPL) and include shares of PYPL as a top-weighted idea in the Best Ideas Newsletter portfolio. As of this writing, shares of PYPL have surged higher by ~140% over the past year as the company’s business model has proven to be incredibly resilient in the face of the coronavirus (‘COVID-19’) pandemic. PayPal’s ability to generate meaningful free cash flows in almost any environment is supported … Read more

Visa Is a Great Company

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Image Shown: Visa Inc’s operations are on the rebound, though meaningful headwinds remain. Image Source: Visa Inc – Fourth Quarter and Full-Year Earnings for Fiscal 2020 IR Presentation By Callum Turcan We have been big fans of Visa Inc (V) for a long time and continue to include shares of V in our Best Ideas Newsletter portfolio as a top-weighted holding. Visa reported its fourth quarter and full-year earnings for fiscal 2020 (period ended September 30, 2020) in late October, which as expected saw the firm’s financial performance face significant headwinds due to the coronavirus (‘COVID-19’) pandemic. However, Visa’s outlook has improved tremendously during the past month as it appears there is a good chance that a safe and viable … Read more