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Economic Commentary – Politics, the WeWork Debacle, and How We Use the Valuentum Buying Index in the Newsletter Portfolios

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In our latest Economic Commentary, the Valuentum team continues its discussion on politics and the markets and the implications of a potential WeWork failure on the commercial real estate and construction markets. We’ll also address a very important question: Why are there lower Valuentum Buying Index ratings in the newsletter portfolios at times? The answer is rather straightforward and a good thing! Let’s get started. Christopher Araos: One comment about the upcoming elections.  The previous one proved to the world how susceptible the general populace of America is to propaganda from abroad–when they could organize rallies for locals to go to and from countries like Ukraine and Russia (RSX). My concern is this literally opens up a can of worms/pandora’s box. … Read more

Honeywell’s Aerospace Division Its Crown Jewel

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We’re huge fans of Honeywell. The company’s Aero operations are its crown jewel, and while Boeing is facing some troubles these days, we don’t expect much impact on Honeywell at all. In fact, we expect commercial aerospace to remain strong, even in the face of broader industrial weakness. The risks to the company’s HBT business could be starting to mount given some concerns in commercial real estate, but management isn’t really seeing any signs of yet, pointing to only moderating growth in 2020. The SPS division, while a headwind, probably won’t be a factor next year, but it could bounce back as inventories are cleared from the channel. By Brian Nelson, CFA Honeywell (HON) has facilitated a number of changes … Read more

Economic Commentary: US-Listed Chinese Names, 60-40 Stock-Bond Allocation and More

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There’s an interesting saying that I came across recently…that hits at the most important component of any fiduciary approach: capital preservation. The saying was “Friends don’t let friends buy and hold.” We’ve always employed the Valuentum strategy, which we believe is much more promising than a traditional buy and hold strategy. – Brian Nelson, CFA The US-China trade war continues with reports indicating that the White House is considering delisting Chinese (FXI, MCHI, KWEB) companies on US exchanges. Let’s get more of the Valuentum’s team’s thoughts on these developments as well as other topics that have come to the fore. The latest alert to members is a great prompt to get the conversation started. The Valuentum Team: If we had … Read more

Primer on the Banking Sector: Where Are We in the Cycle?

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Image Source: GotCredit Three of our favorite banks are JPMorgan Chase, Bank of America, and US Bancorp. These are three very high-quality institutions which are also very well managed. They all benefit from cultures that encourage the right kind of risk/reward thinking. If these equities start to trade at a meaningful discount to our fair value estimates, they may be are worth considering as long-term investments, in our view. Summary We’ll talk about how banks make money, and the three most important costs of running a bank. The Great Financial Crisis revealed the tremendous risks of banking equities, and we’ll walk through these in depth. We’ll discuss how to conceptualize where we are in the banking cycle, and how that … Read more