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Why Don’t They Get It? Process Is More Important Than the Companies You Select

publication date: Jan 20, 2015
author/source: Brian Nelson, CFA

Case Study: Apple (AAPL)

July 24, 2013: “We added to our position in Apple. We think the shares are significantly undervalued, and we’re seeing some re-affirming market action following its strong quarterly report… (source).”

The chart of Apple and the philosophical illustration below show how using the Valuentum process helped maximize profits in Apple within the newsletter portfolios. While others were still unsure whether Apple would come to reflect its intrinsic value and sat on the sidelines, a powerful technical breakout gave us all the incremental information we needed on this underpriced idea to add more shares to the Best Ideas portfolio. We also opened a new position in the Dividend Growth portfolio at that time. This particular breakout--when a downtrend is broken through--is incredibly powerful. The market, in essence, told us when it was time to buy Apple.

Apple has performed wonderfully since then – a homerun, indeed, and textbook execution of the process. The select few firms that make it to the newsletter portfolios also mean that we have a very high batting average – the number of firms added to the newsletter portfolios that are outperforming the market divided by the total number of firms added. Any firm that has been added to the newsletter portfolios is currently in its stock pricing cycle, which is why we may have firms with lower Valuentum Buying Index ratings in the portfolios. It takes time for the “Valuentum” thesis to play out -- just look at Apple below, for example. It has been ~18 months since the 'consider buying' signal. Fabulous and worth waiting for. Stick to the methodology.

The High Yield Dividend Newsletter, Best Ideas Newsletter, Dividend Growth Newsletter, Valuentum Exclusive publication, ESG Newsletter, and any reports, data 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, data 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, and independent contractors may have long, short or derivative positions in the securities mentioned on this website. The High Yield Dividend Newsletter portfolio, ESG Newsletter portfolio, Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Performance, including that in the Valuentum Exclusive publication and additional options commentary feature, 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