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Just How Good Have We Been?

publication date: Aug 21, 2020
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author/source: Brian Nelson, CFA
Image: We have been absolutely pounding the table on big cap tech and large cap growth for many months now. It has been one of the rare buckets to have done well this year. By well, we mean superb. Source: Zerohedge
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Hi everyone:
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Brian here. Just how good have we been for members?
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After capping off one of the best years in the Best Ideas Newsletter portfolio in 2019, we highlighted broad market put option ideas in late February and early March--right before the COVID-19 crash that shocked the markets. 
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Then, just about right near the bottom, we highlighted 17 of 20 outperforming ideas--strong net-cash-rich, free-cash-flow generating powerhouses with strong secular growth tailwinds. We then went all-in in the newsletter portfolios in late April, just in time for the best 100 trading days in the S&P 500 in history. 
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But perhaps the chart above says even more. You know that we have been absolutely pounding the table on large cap growth, big cap tech, and the NASDAQ, and the bucket of large cap growth is up 23% this year, significantly ahead of any other style. Significantly.
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Image: Many of the top holdings in this large cap growth ETF have been (and continue to be) top holdings in the newsletter portfolios. Source: Schwab.
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I traveled around the country during my book tour for the first edition of Value Trap, and I emphasized how growth stocks in 2019 actually were the undervalued ones based on the process of enterprise valuation. In our concentrated value-oriented equity newsletter portfolios, we included Microsoft, Apple, Facebook, Alphabet, Visa, many of the top-weighted ideas within the large cap growth space. The newsletter portfolios have done incredibly well.
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I'm writing this note, again, not to brag, but to see how you're doing. I received a few questions/comments during the past week on backward-looking data, insurers and banks, and old industrial names Dow and General Electric, among others--areas that we have no interest in. We're not interested in these beaten down areas. 
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I'm worried because I'm not getting the questions in the areas of outperformance--the areas that we're hoping investors have been in for a long time now--large cap growth, big cap tech, the NASDAQ, for example. Facebook is, by far, one of our favorite names. Have you looked at this one?
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From my perspective, many of the big cap, large-cap growth names are among the least-riskiest on the market due to their fantastic "moaty" business models, strong balance sheets and future expected free cash flow generation. Many of them such as Microsoft and Apple may turn into the best dividend growth stocks in the coming decade, too.
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I guess I wanted to say, in part, our work this year has been great. You're not going to find these prescient calls anywhere else, to my knowledge. Very few called the crash, even fewer called the bottom, and it seems most missed the best 100 days ever in the stock market. 
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More importantly, however, I want to hear that you're doing great, too. I want to hear how you've knocked the cover off the ball with ideas in the newsletter portfolios. I want to hear questions on ideas in the newsletter portfolios/Exclusive, questions on our favorite ideas. Many of you should be absolutely crushing the market return in 2020.
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Let me know how you're doing. I'd love to hear from you! Remember -- Valuentum is not a money manager, and it doesn't take a stake in its idea generation--meaning our interests are entirely aligned with your success. We work for you. 
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Thank you so much for being here. I hope you and yours are well and that you continue to follow me with each and every endeavor we pursue!
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Always my very best,
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Brian Nelson, CFA
President, Investment Research
Valuentum Securities, Inc.
brian@valuentum.com
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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 free.
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Brian Nelson owns shares in SPY and SCHG. Some of the other securities written about in this article may be included in Valuentum's simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.

1 Comments Posted Leave a comment

haimginzburg@gmail.com GINZBURG (chicago)
 

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