USO

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.

Protectionists Gaining Control, Implications on Europe and China

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It looks like the US-imposed tariffs are moving forward, and we’re starting to hear chatter about retaliation from Europe. Canada and Mexico may be exempt from the tariffs, however. By Kris Rosemann Mr. Market reacted unfavorably to President Trump’s top economic advisor Gary Cohn’s resignation announcement March 7, as Cohn was seen as a voice for Wall Street in the White House. Though the reaction may be short-lived, fears of the implications of increasing control from protectionists probably shouldn’t be ignored, and the probability of a trade war, particularly with China (FXI, MCHI) and with Europe, presumably moves higher with Cohn’s exit. Canada (EWC) and Mexico (EWW) may be exempt from the tariffs, however. The European Union is already reportedly … Read more

Fed Chair Powell’s Debut, Retail Earnings Roundup, and the Dividend Cushion!

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The 10-year Treasury yield continues to outpace that of the average dividend yield of an S&P 500 stock, and portfolio managers continue to evaluate long-term allocations as a result. We evaluate the initial testimony from new Fed chairman Jay Powell, report on developments in the crude oil markets, and survey the retail landscape to offer incremental insight into the health of the consumer. The Dividend Cushion ratio continues to prove its worth. By Kris Rosemann and Brian Nelson, CFA The month of February was a wild ride for investors, and it wasn’t pleasant. The stock market experienced incredible swings, both to the upside and to the downside, like no other time in recent memory as the very real risk of … Read more

Stocks Stage Comeback, US Government Budget Released

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Image shown: The performance of the Dow Jones Industrial Average since September 2017. The market continues to lick its wounds following the sell-off. We’re watching interest rates and technicals for signs where the market may go next. By Kris Rosemann and Brian Nelson, CFA The US 10-year Treasury yield (TLT, TBT) hit a four-year high before the open February 12, suggesting recent volatility in the equity markets is anything but going away in the near term, despite stocks bouncing back from the rough week that ended February 9. Rising interest rates may not create a financial crisis, but it could challenge the widely-held view that stock prices only increase over long-enough periods of time. After all, the past 40-year bull … Read more

The Sell Off February 5 Remains Minimal Compared to the Gains of Past Years

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Image shown: The SPDR Dow Jones Industrial Average ETF (DIA) share price performance since mid-2009. The pullback the past few days hasn’t amounted to much, but it has caught the attention of investors.   Recent equity market price declines don’t add up to much compared to the huge gains of recent years. Typical bear markets result in the evaporation of nearly 40% of investor wealth, on average. By Kris Rosemann and Brian Nelson, CFA The recent sell-off in equities accelerated in the trading session February 5 as concerns regarding an uptick in inflation (embedded in discount rates within valuation frameworks) and potentially materially tightening monetary policy in the US are weighing on investors’ minds. When the dust finally settled at … Read more

Bioverativ’s Takeout, Visa’s Surge, and General Electric’s Pain

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From Bioverativ’s takeout to Visa’s stock price surge to General Electric’s continued pain, there’s a lot going on in the stock market. Let’s cover some ground. By Kris Rosemann and Brian Nelson, CFA It’s hard to believe this but our best idea in the Best Ideas Newsletter portfolio, Visa (V), is now a $124+ per share stock. We know how to pick ‘em, would you say? We don’t get everything correct, of course, but if you’ve read anything on our website, we can only hope that you’ve witnessed Visa’s meteoric rise. The high end of our updated fair value estimate range for Visa is north of $130 per share. What a wild ride it has been, to say the least, … Read more

Hanesbrands Leaps, IBM Falters and More

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We were pleased to see the recent performance of Hanesbrands, and we continue to think IBM is not yet out of the woods, despite some life with respect to revenue trends. Let’s cover this and more. By Kris Rosemann There are a lot of things happening in the markets these days. For starters, growth in the world’s second-largest economy accelerated for the first time in seven years as China’s reported growth of 6.9% in 2017 was slightly higher than the 6.7% it achieved in 2016 and the projected growth rate for 2017 of ~6.5%. However, many observers are anticipating a return to the slowing trends of years past as the Chinese government works to reduce risky lending in areas such … Read more

2018 Starts Out with a Bang!

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Image Shown: An ETF that measures momentum (MTUM) has done considerably better than the S&P 500 since the beginning of 2017. Among its top 5 holdings are Microsoft (MSFT), Apple (AAPL), Boeing (BA)—newsletter holdings that have had excellent value characteristics along the way. Visa (V) is also included in its top 10 holdings.

Even some the most bullish and optimistic investors have been surprised by the resiliency of today’s market environment. Why does it seem appropriate to remind members that the stock market doesn’t always go straight up with almost no volatility?

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