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Valuentum Research Update

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— Valuentum Research Update — Hi everyone! — Hope you all are doing great! I must say I couldn’t be more pleased with the research we’ve been putting out, and thank you very much for your continued interest. In this piece, I wanted to get some of our latest work to you.  — First, please note that we’ve done a great job holding the line on many of our fair value estimates (ranges) on our website. Many stocks have been bouncing back, and we’re glad we didn’t rush through any updates. Updating fair value estimates (ranges) too frequently doesn’t make much sense to us. We’re after the right answer, not any answer.  — Second, our team has been busy writing up some very … Read more

ICYMI — Stay Optimistic. Stay Bullish. I Am.

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  Image: My great-grandfather (second from left) and his buddies in the 88th Division of the United States Army during World War I, at the time of the Spanish Flu pandemic of 1918-1919. He would serve under Major General William Weigel, become proficient in the 37mm gun, and take part in the largest offensive in U.S. military history, the Meuse-Argonne Campaign. As a corporal, he would survive the Great War and the Spanish flu pandemic, returning to the U.S. in May 1919 from the port of Saint-Nazaire, France on his way to Omaha, Nebraska.  This article was published May 15, 2020. — New (updated June 4): We continue to encourage members to study the ‘Duration of (Stock) Value Composition’ in Value Trap: Theory of … Read more

Dow Jones Surges Past 27,000; Bull Market Continues!

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Dow Jones Surges Past 27,000; Bull Market Continues! — By Brian Nelson, CFA — Hi everyone! — What a bull market off the lows we are having. I don’t think we’re finished, as I have pounded the table time and time and time again about how bullish I am. In the words of Frank Sinatra, “The Best Is Yet to Come,” and I truly believe that. Yesterday, I explained to readers why we’re seeing this huge rally, “Stay Optimistic. Stay Bullish. I Am.”  — If you understand the duration and composition of equity value (page 74-83 in Value Trap), you can start focusing on what drives share prices and returns. How else could a market rally this much with 13% unemployment, right? How wonderful it … Read more

ALERT: Important Recap of Valuentum’s Research and Market Events

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ALERT: Important Recap of Valuentum’s Research and Market Events: Unequivocally Bullish, S&P Target Range Was Withdrawn Last Month, Continued Focus on Individual Stock Selection with “Moaty” Operations, Huge Net Cash Positions, Strong Expected Future Free Cash Flows, Established Recurring Business Models, and Otherwise Attractive Economic Castles. Big Cap Tech and Large Cap “Growth” Remain Our Favorite Allocations. — Image: Breaking out to new highs, Facebook (FB) is a top weighting in the Best Ideas Newsletter portfolio (which includes our favorite capital appreciation ideas in a portfolio setting). The social media giant is surging on news of a new Shops feature, something we’ve been expecting and raving about with respect to its potential for years–as we maintain our view that, anti-trust considerations aside, Facebook … Read more

Earnings Roundup for Week Ended May 17

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Image Shown: We cover several earnings reports in this article across several sectors and industries to provide an overview of how corporates performed during the early stages of the ongoing coronavirus (‘COVID-19’) pandemic. 

Reducing expenses, generating efficiency gains, and ultimately improving the cost structure of corporates appears to be a key theme during the first-quarter 2020 earnings cycle. Management teams across the board are hunkering down and preparing for the pain to continue as global economic activity is expected to grind to a halt in the second quarter of 2020, before recovering somewhat due in part to massive fiscal and monetary stimulus measures that were launched to offset the negative impact COVID-19 is having on economic activity.

ALERT: Going to “Fully Invested” — The Fed and Treasury Have Your Back

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Image Source: BEA. Real GDP fell at an annual pace of 4.8% in the first quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. Summary For members to our new options commentary service, the second April options idea will be released tomorrow. We’re taking the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested,” scaling up our existing positions to reflect that status. We plan to consider put options to hedge against downside risk, if or when the time comes. Moral hazard continues to run rampant, and the Fed and Treasury may have no choice but to continue artificially propping up this market, even buying stocks through certain vehicles, if necessary. … Read more

Emergency Update on COVID-19

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President of Investment Research at Valuentum, Brian Nelson provides an emergency update on COVID-19. He talks about how policymakers have dropped the ball thus far, and why investors should not let their guards down, despite what has been a nice bounce from the March 23 bottom. As of April 24, the world has now borne witness to the deaths of nearly 182,000 people from Coronavirus disease, or COVID-19, with more than 2.6 million confirmed cases. The United States remains the epicenter of the global pandemic with the country confirming 830,000 cases and more than 42,000 deaths. The sad reality is that, despite the many months that have now passed, medical professionals know little more about the disease than when news … Read more

What To Do Now?

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— Dear members: — It’s Brian here. It seems like I went to bed February 22 after writing the following note to you — Is a Stock Market Crash Coming? — Coronavirus and P/E Ratios — and just woke up now. That’s how crazy the markets have been. It’s been two months of a whirlwind of a ride. For those just joining today, we recapped the events since our warning about the Great Crash of 2020 on February 22 in the following two videos — The Question Is If the Economy Can Be Held Together Without Vast Equity Dilution (April 12) and Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway? (April 19). — Before going on, I want to pause … Read more

ICYMI — Video: The Question Is If the Economy Can Be Held Together Without Vast Equity Dilution

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President of Investment Research at Valuentum and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how the range of probable fair value outcomes of S&P 500 companies has increased as a result of COVID-19 and possible equity dilution on the downside to long-run inflationary pressures on stocks driven by runaway Fed and Treasury stimulus on the upside. — Editor’s note: Brian emphasizes the importance of “expert analysis” over “backward-looking analysis,” and we would like to clarify that he is not giving personalized advice. Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are … Read more

Bullets: Recapping the Crash, Where Are We Now?

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Image: The S&P 500 has only retraced a small part of its decline since the top in February 2020. By Brian Nelson, CFA In August 2019, Valuentum took a cautious bent on the markets, removing the Financial Select Sector SPDR (XLF) and the Energy Select Sector SPDR (XLE), raising cash at the time. Financials and energy have been material underperformers during the swoon, with the Fed/Treasury launching more stimulus than the Great Financial Crisis and Saudi Arabia/Russia continuing their oil-price war. Here’s what we said in August 2019: August 2019: There are myriad risks as we near the end of this now-decade long bull market: a US-China trade/currency war, slowing global economic growth (Germany’s economic growth turned negative during the … Read more