Valuentum Exclusive Analysis for the Discerning Investor

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Sep 19, 2019

DGN Holding Microsoft Continues to Deliver
Image Source: Microsoft - IR Presentation. We continue to like Microsoft in our Dividend Growth Newsletter portfolio and think the firm is well positioned to ride out any storm that may arise due to the synchronized slowdown in global economic growth. As a true free cash flow king sitting on a pile of (net) cash, there’s a lot to like about Microsoft’s income growth story.

Sep 16, 2019

Economic Roundtable: Quant Quake, “Quac-cidental Correlation,” and Economic Moats
Image Source: Anders Sandberg. Last week, the markets may have revealed that internals aren’t all that healthy. Major equity markets experienced a “rotation” that reminded many investors of the “quant quake” from August 2007. As Valuentum’s Brian Nelson wrote in Value Trap, “just a few bad days in the market caused a rapid unwinding of many quant long-short strategies (back then). Goldman’s chief financial officer said at the time that the firm was witnessing ‘25-standard deviation moves, several days in a row.’” On the surface, markets last week seemed relatively calm, but as the episode in 2007 revealed the activity last week may just be the calm before the storm. Many are pointing to overcrowded trades in betting against certain factors, while others are saying that many were forced to deleverage. We’re not so sure, and we think it may be the opposite: after years of suffering from lagging “value” returns, we think several quant shops stepped in to take on leverage, betting on a return to “value.” Let's talk about last week's quant quake, spurious correlations (the “guac-cidental correlation, in fact), economic moats and much more.

Sep 11, 2019

Economic Roundtable: “Value” Versus “Growth” Rotation
“This kind of trading activity could be setting the stage for a big quant fund blow up, if the kind of leverage it takes to move the markets to this magnitude was applied. All it may take is for the B/M “value” factor to continue to suffer in the coming 12-18 months--it’s possible we could see a few quant firms go belly up. My guess is that market participants are paying very close attention to this activity, and if they “smell blood,” things could get ugly.” – Brian Nelson, CFA

Sep 11, 2019

Apple Makes Its Big Push Into Services
Apple announced that Apple TV+ would launch November 1, 2019, during its big update event on September 10. This marks the beginning of Apple’s transition from a hardware and software company to a hardware, software, and services giant.

Sep 5, 2019

Valuentum’s Economic Roundtable: Trade War, Factors and Beyond
The markets rallied hard September 5 on relief that the US and China will go back to the negotiations table next month. This back-and-forth news cycle is enough to give any investor whiplash. Let’s catch up with the Valuentum Team on the latest developments, not only with the trade war but also with respect to factor investing, possible bubbles and beyond.

Sep 4, 2019

The "Hierarchy" of Valuentum Idea Generation
Image: The Valuentum Buying Index rating scale.Let's talk about this hierarchy of idea generation in this note.

Aug 26, 2019

The Valuentum Team Talks Powell Speech and Threat of Global Recession
Last week, China issued retaliatory tariffs on US goods, and Trump responded in kind, escalating trade tensions. Caught in the middle of this US-China trade war is the Fed, however. Let’s sit down with the Valuentum team and kick things off with our thoughts on Fed Chairman Powell’s speech, Challenges for Monetary Policy issued August 23 in Jackson Hole, WY.

Aug 22, 2019

What’s on the Valuentum Team’s Mind?
Let’s get the Valuentum team’s thoughts on recent developments.

Aug 15, 2019

Our Reports on Stocks in the Software Industry
We've optimized our technology coverage.

Aug 13, 2019

Thought Piece: The Hidden Advantage
Image Source: Kamilla Oliveira. As activist investing proliferates, investors are becoming more and more familiar with celebrity investing gurus such as Carl Icahn and David Einhorn. Let’s examine how these investing giants have carved out a unique structural advantage over mom-and-pop investors. This article was originally published in June 2014.