Valuentum Exclusive Analysis for the Discerning Investor

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Jan 8, 2024

Thinking Slow: 3 Research Blind Spots That Changed the Investment World
Image Source: EpicTop10.com. We have to be on high alert about how our minds work. PBS recently delivered a four-part series examining how easily our minds are being hacked, and why it is so important to "think slow." When it comes to the active versus passive debate, does the analysis suffer from parameter risk? With respect to empirical, evidence-based analysis, does the analysis have the entire construct wrong? When it comes to short-cut multiples, are we falling into the behavioral trap of thinking on autopilot?

Jul 27, 2023

“Bought” Low and “Sold” Low with Meta
Image: Shares of Meta Platforms have been on a wild ride the past few years. We didn’t do well with the stock, unfortunately. Let the good times roll in big cap tech and large cap growth! What a fantastic year 2023 is turning out to be and thank you for sticking with us. If Meta serves as any example for you, it should be that you shouldn’t expect us to get everything "right," but it should be very, very clear that we’ve gotten far more things “right” than we’ve gotten “wrong” over the years. Cheers!

Jul 6, 2023

Meta’s Threads Launch Immaterial to Meta But Tragic for Twitter
Image: Threads logo. Meta has launched a Twitter-killer with its new real-time online conversation app, Threads. Meta’s launch of Threads may not be too big of a needle-mover at Meta when it comes to new advertising dollar spending, but we like the incremental move toward creating an ecosystem of interconnected apps and properties. We think Twitter’s days are numbered, with the bird app already shedding a large percentage of its workforce just to keep the lights on. We might see a cage match between Musk and Zuckerberg after all.

May 30, 2023

Paper: Value and Momentum Within Stocks, Too
Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks.

Mar 21, 2023

The Power of Expectations: How Financial Advisors Can Improve Client Retention
Image Source: Frédéric Glorieux. This could make the difference between a happy client and a lost client.

Jan 5, 2023

The Fed ‘Can’t Stop, Won’t Stop’ Until Labor Market Feels More Pain
Image: Prices for private label brands at Aldi are considerably lower than those of branded products. The consumer staples sector, however, remains fully-priced with a 21+ forward earnings multiple, and many constituents hold large net debt positions. We believe the sticking point for the Fed is not groceries or gasoline prices, but rather the labor markets, which remain very strong, despite layoffs. Image Source: Valuentum. We maintain our view that markets will remain challenged for at least the first quarter of 2023, and we expect the S&P 500 to bottom around 3,400 based purely on a technical evaluation of the ongoing downtrend. The labor market remains too strong for the Fed to stop rate hikes, as the primary concern for the Fed is not what inflation will do this year, but rather whether it will spike again in 2024. To truly stomp out inflation, the Fed needs to witness further weakening in the labor markets, as consumers have found ways to trade down to offset grocery inflation and as gas prices at the pump ease. We’re never happy to hear of layoffs, but an unemployment rate of 4.5%-5% may be the range required for the Fed to stop hiking, in our view. The last thing the Fed wants is to stop hiking too early, only for inflation to come roaring back in the quarters that follow the pause. The Fed is not thinking about year-over-year inflation numbers for 2023, in our view, but rather policies that will ensure that inflation rates of the past 12-18 months do not return in 2024-2025. They are playing the long-term game.

Jan 3, 2023

Our Reports on Stocks in the Technology Giants Industry
Our reports on stocks in the Technology Giants industry can be found in this article. Reports include META, AAPL, GOOG, AMZN, MSFT, CSCO, V, MA, PYPL, INTC, ORCL, QCOM, ADI, IBM, ADBE, NVDA, CRM, AMD, AVGO, BABA, BKNG, BIDU, TSM, TXN, EBAY, ADP, MU, KFY, MAN, KLAC, LRCX, AMAT.

Oct 30, 2022

Something New!
Hi everyone: To stay true to our mission, you'll find something new regarding our methodology. In the coming weeks, you'll see this table in our work going forward.

Oct 28, 2022

In the News: META, AAPL, AMZN, RSG, DLR, VRTX, XOM, CVX
Image Source: Valuentum. Readers should expect a substantial reduction in our fair value estimate of Meta Platforms on the basis of materially reduced forecasts of free cash flow. Apple’s calendar third-quarter results were good, considering that many were worried about iPhone 14 demand heading into the report. Amazon’s results support a cautious tone with respect to consumer spending, while we remain bullish on three of our best-performing ideas so far in 2022 – Vertex Pharma, Exxon Mobil, and Chevron. We didn’t see anything in the Republic Services and Digital Realty reports that would warrant any material changes to our theses at this time.

Oct 27, 2022

VBI Ratings Not as Impressive As We Would Have Liked in 2022
Image: How the VBI rating system has ranked equities so far this year. At Valuentum, we use the Valuentum Buying Index (VBI) to source ideas into diversified simulated newsletter portfolios, and the VBI may be most applicable to the simulated Best Ideas Newsletter portfolio, where we generally like to include ideas when they register a high VBI rating and remove them when they register a low VBI rating. We always use the VBI in a portfolio setting and never by itself. Let's talk more about the VBI rating system in this work.