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The Valuentum Learning Center

publication date: Aug 16, 2018
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author/source: Valuentum Editorial Staff

Image Source: Gaby Av

At Valuentum, we believe in the ongoing education and development of our employees, members and visitors. Lifelong learning is something our company holds very dear, as part of our corporate mission is to serve the needs of investors of all types. Having trained and mentored over one hundred equity and credit analysts at such large research firms as Morningstar, President of Equity Research & ETF Analysis Brian Nelson has dedicated a large portion of his career to helping others achieve their professional aspirations and investing goals. This dedication to investment education has continued at Valuentum.

President Brian Nelson's Letter to Members

Hi folks, 

You may have read many stories of others that learned of stock investing at a really young age, perhaps they bought their first stock before their 10th birthday or their parents had been a part of the finance industry. This wasn't me. I would probably describe myself as a late bloomer. I first became interested in the stock market probably in grade school, with a stock market game we played in either 3rd or 4th grade, and then my interest grew in high school. When I first enrolled in undergraduate studies, however, I actually had plans to major in biology and become a doctor. It wasn't until a week or so into classes where I made the switch to finance. I haven't looked back since.

My professional journey in finance started in the aggressive-growth money-management industry, where I learned to “live” the markets. From my 5am morning coffee and crisp Wall Street Journal to anticipating firms “breaking out” in the early afternoon, little did I know that my buy-side experience at Driehaus Capital Management was preparing me for this Valuentum journey. After earning an MBA from the University of Chicago Booth School of Business and the Chartered Financial Analyst designation, I then pursued the great satisfaction of helping others achieve their dreams.

In my role as Director of Global Equity and Credit Research (Training and Methodology) at Morningstar, one of the largest independent research companies in the world, I dedicated my time to training and mentoring stock and credit analysts on the intricacies of discounted cash-flow and competitive-advantage analysis. Many of these colleagues are now the heads of department at the company. At Morningstar, I truly learned to “live” valuation and competitive analysis in ways others may never come to know.

In early 2011, I realized what my experience at Driehaus and Morningstar may have been all about, my life’s calling: Valuentum Securities. It dawned on me that very few investors have ever had the opportunity to use technical and momentum indicators in a money-management setting and also build an extensive discounted cash-flow valuation infrastructure and methodology for one of the largest independent research firms in the world. Though I didn't know what to expect, I knew what I had to do: share with others the tremendous benefits of Valuentum investing – the combination of two investment frameworks seemingly in complete opposition within stocks: value and momentum (but also everything in between). Most academic research views value and momentum generally in a portfolio setting, but not within the same stock like we do. I am honored to introduce you to the Valuentum Style of Investing. 

Though part of the mission at Valuentum is to help readers better understand the movement of security prices via Valuentum Buying Index ratings, please don't forget about the many other features of our website, not the least of which is the Dividend Cushion ratio and our forward-looking dividend analysis as well as fair value estimates/ranges and the Economic Castle rating (which can accompany economic moat assessments). We think we created one of the most helpful tools with respect to forward-looking dividend analysis in the Dividend Cushion ratio, one that combines an evaluation of both the balance sheet and cash flow statement into one meaningful number. Most importantly, please enjoy what we have to offer at Valuentum. Whether it's our valuation work and the fair value estimates or the Dividend Cushion ratios or something else you like the most about our work, I'm glad you are here!

Yours truly,

Brian Nelson, CFA

Valuentum Methodology Papers

Study: Best Ideas Newsletter Portfolio (pdf), Tatiana Dmitrieva, Kris Rosemann and Brian Nelson, CFA

Value and Momentum Within Stocks, Too (2017), Brian Nelson, CFA

How Well Do Enterprise Cash Flow Derived Fair Values Predict Stock Prices (2017), Brian Nelson, CFA

Why Valuentum Buying Index Ratings Matter (2014), Brian Nelson, CFA

Valuentum's Methodology Document (pdf), Valuentum Analysts

The Valuentum Buying Index (2011), Brian Nelson, CFA

The Case for the Valuentum Style of Investing (2012), Brian Nelson, CFA

Investing's Odd Couple: Value and Momentum (pdf), AAII

The Seven Most Important Considerations of the Valuentum Buying IndexBrian Nelson, CFA

The 16 Most Important Steps to Understand the Stock MarketBrian Nelson, CFA

Valuentum’s 3 Breakthroughs in the Field of Finance and More, Valuentum Editorial Staff

Archive: Nelson's "Off the Cuff" Video Series (December/January 2017/18)

Works on Dividends and Castles and Criticism of Quantitative Investing 

Aiding in Misbehaving, Notes on Inefficient Markets and Backward-Looking-Derived Factors (pdf), Brian Nelson, CFA

The Universal Theorem of Value, aka The Tragedy of Quantitative Finance (2018), Brian Nelson, CFA

The "Luck" and "Randomness" of Index Funds (2018), Brian Nelson, CFA

Indexing Moves Markets and Creates Inefficiencies (2018), by Brian Nelson, CFA

Are Markets Efficient? (video), Chicago Booth Review

Our Dividend Methodology Is Rocking!, Kris Rosemann and Brian Nelson, CFA

Valuentum's Dividend Cushion Ratio, Brian Nelson, CFA

A New Measure of Leverage for Dividend-Growth and Income-Oriented Shareholders, One That Is Dividend-Adjusted, Brian Nelson, CFA

Introducing the Economic Castle Rating, Brian Nelson, CFA

The Price-to-Earnings Ratio Demystified, Brian Nelson, CFA

Valuentum Glossary of Terms, The Valuentum Team

More Suggested Reading

Important Academic Studies

Value and Momentum Everywhere, Asness, et al

Fact, Fiction and Momentum, Asness, et al

A Better Bet, Tobias J. Moskowitz

Do Industries Explain Momentum, Moskowitz, Grinblatt

Measuring the Moat, 2002, Michael J. Mauboussin

Measuring the Moat, 2013, Michael J. Mauboussin

Measuring the Moat, 2016, Michael J. Mauboussin

The Truth About Diversification by the Numbers, Surz and Price

CFA Institute Research Foundation

Equity Valuation: Science, Art or Craft?

Financial Market History, Reflections on the Past for Investors Today

The Equity Risk Premium: A Contextual Literature Review

Miscellaneous

Discounted Cash Flow (DCF) Valuation, Brian Nelson, CFA

Valuentum’s Weighted Average Cost of Capital (WACC) Distribution, Brian Nelson, CFA

Investing's Odd Couple: Value and Momentum (2013), AAII website

Keynes's 'beauty contest,' Richard Thaler

The Ultimate Cash Flow Guide (EBITDA, CF, FCF, FCFF), Corporate Finance Institute

Legacy of Benjamin Graham, Columbia

Morningstar's Cash Flow Cushion, Brian Nelson, CFA

History of US Bear & Bull Markets Since 1926, First Trust

The Free Dividend Fallacy (video), Chicago Booth

Warren Buffett Archives, CNBC

Warren Buffett's First Television Interview (1985)

Berkshire Hathaway Shareholder Letters

Securities & Exchange Commission (SEC) Historical Society

Valuentum's Member Orientation Videos

A Guide to Using Valuentum's Stock Reports (pdf)

Valuentum's Orientation & Methodology Seminar, YouTube

Valuentum's 16-page Equity Research Reports Video (Flash required)

Valuentum Slide Deck Presentations*

March 8, 2017: Trust the Numbers, Not Just Management, CFA Society Houston, Kris Rosemann and Brian Nelson, CFA

          --> Handout 1: Pitfalls of Distribution Yield Analysis (pdf)

          --> Handout 2: Linking P/DCF to Enterprise Free Cash Flow Valuation (pdf)

Ask about our previous presentation slide decks.

October 22, 2016: Trust the Numbers, Not Just Management, Chicago AAII Chapter, Kris Rosemann and Brian Nelson, CFA

May 12, 2016: Trust the Numbers, Not Just Management, Naples, Florida, Brian Nelson, CFA

March 8, 2016: Dividend Growth Investing (note-taking slides), St. Louis Chapter, Brian Nelson, CFA

January 2, 2016: Value-Focused, Momentum-Based Dividend Growth Investing, Phoenix AAII, Brian Nelson, CFA

September 16/17, 2015: Value-Focused, Momentum-Based Dividend Growth Investing, Milwaukee/Madison AAII, Kris Rosemann and Brian Nelson, CFA

September 9, 2015: Value-Focused, Momentum-Based Dividend Growth Investing, Silicon Valley, Brian Nelson, CFA

July 15, 2015: Value-Focused, Momentum-Based Dividend Growth Investing, Cleveland AAII, Brian Nelson, CFA 

January 17, 2015: The Ultimate Dividend Growth Investing Tool, Milwaukee AAII, Brian Nelson, CFA

November 15, 2014: The Ultimate Dividend Growth Investing Tool; DePaul University AAII, Brian Nelson, CFA

May 13, 2014: The Ultimate Dividend Growth Investing Tool; Las Vegas Money Show, Brian Nelson, CFA

September 6, 2013: Introduction to Valuentum Securities, Inc; Brian Nelson, CFA

May 14, 2013: 12 Steps to Understand the Stock Market; Las Vegas Money Show, RJ Towner & Brian Nelson, CFA

October 13, 2012: Why Our Methodology Works; DePaul University AAII, Brian Nelson, CFA

June 17, 2012: Why Our Methodology Works; "From Value Through Momentum Investing," Brian Nelson, CFA

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* The High Yield Dividend Newsletter portfolio, Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Results are hypothetical and do not represent actual trading.

About Our Name

But how, you will ask, does one decide what [stocks are] "attractive"? Most analysts feel they must choose between two approaches customarily thought to be in opposition: "value" and "growth,"...We view that as fuzzy thinking...Growth is always a component of value [and] the very term "value investing" is redundant.

                         -- Warren Buffett, Berkshire Hathaway annual report, 1992

At Valuentum, we take Buffett's thoughts one step further. We think the best opportunities arise from an understanding of a variety of investing disciplines in order to identify the most attractive stocks at any given time. Valuentum therefore analyzes each stock across a wide spectrum of philosophies, from deep value through momentum investing. And a combination of the two approaches found on each side of the spectrum (value/momentum) in a name couldn't be more representative of what our analysts do here; hence, we're called Valuentum.

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Valuentum has developed a user-friendly, discounted cash-flow model that you can use to value any operating company that you wish. Click here to buy this individual-investor-friendly model now! It could be the best investment you make.


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The High Yield Dividend Newsletter, Best Ideas Newsletter, Dividend Growth Newsletter, Nelson Exclusive publication, and any reports and content found on this website are for information purposes only and should not be considered a solicitation to buy or sell any security. Valuentum is not responsible for any errors or omissions or for results obtained from the use of its newsletters, reports, commentary, or publications and accepts no liability for how readers may choose to utilize the content. Valuentum is not a money manager, is not a registered investment advisor, and does not offer brokerage or investment banking services. The sources of the data used on this website and reports are believed by Valuentum to be reliable, but the data’s accuracy, completeness or interpretation cannot be guaranteed. Valuentum, its employees, independent contractors and affiliates may have long, short or derivative positions in the securities mentioned on this website. The High Yield Dividend Newsletter portfolio, Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Performance, including that in the Nelson Exclusive publication, is hypothetical and does not represent actual trading. Actual results may differ from simulated information, results, or performance being presented. For more information about Valuentum and the products and services it offers, please contact us at info@valuentum.com.