Value Investing with Sven Carlin, Ph.D.
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Total Ideas
62
With Returns
13
Equal-Weighted Return
+1.68%
All Ideas (62)
62 TotalConditional Buy Opportunity in CALM on Price Dips
"The best time to buy commodity cyclicals is when it looks ugly, not when it looks great with a 10% dividend yield. So if we go to a gross profit of 10% net income of zero, which was the case with lower prices, we see that the company doesn't make money. And then when people and investors capitulate when there are no dividends and you bought it for the dividend when the price is not going up and you bought it because you hoped for more avian flu or something that's the time to look at it and then wait for these unknowns that's where the upside is because if egg prices for whatever reason I cannot predict avian flu or things like that stay low it means the dividend will be cut the dividend yield will go from 10 to 1% because there is simply no profit and then it will get revalued and it might get from 80 to 40 if there is no outlook for higher cash flows and that might make it interesting. Now you're risking upside 120 if egg prices go higher again on avian flu versus downside 40 if there is over supply."
The speaker identifies CALM as an attractive long-term opportunity which becomes compelling when the stock's earnings and dividends are hit by lower egg prices. He argues that buying when the company appears to be struggling, with earnings near zero and a dividend cut imminent, offers significant upside if egg prices recover, albeit with controlled downside. The view is presented as a conditional buy, waiting for a substantial price dip – potentially once in a decade – before capitalizing on the cyclic recovery.
Apple as a Lower-Risk Safe Stock
"And I asked this was in November, 'give me a no risk highreward stock to buy now. What low-risk value investing?' Okay. He says there is no true no risk high reward but let's lower risk stocks and what does he give me at the lower risk Apple then he elaborates still on the risk and reward protection all good there and then Apple because the market sees it as that the suggestions is there relatively relatively safer stock at price."
The speaker recounts asking for a low-risk, high-reward stock pick and receiving Apple as the answer. The commentary emphasizes that while AI tools can provide fast information, the true value lies in human decision making. The remark on Apple highlights its perception as a safer, lower-risk option within value investing.
Positive Company Commentary on Berkshire Hathaway
"A great comment here on Burkshshire how it is a great business delivering earnings. However, you have to check the price you are paying and how the earnings return fits you. Bergkshire is great."
The speaker offers a favorable view on Berkshire Hathaway, noting its strong earnings performance while cautioning investors to consider the valuation and earnings return. The commentary suggests that while the business fundamentals are robust, investment decisions should factor in the price and expected yield.
Macro Commentary on Interest Rates and Market Risk
"Yes, in the short term we have Trump saying that interest rates will go to 2% will likely happen. In the very long term, we already see issues with inflation, things like that, which means interest rates with higher inflation might be higher on the long term. And interest rates work like gravity on financial assets over the long term because if you look at the current earnings, the S&P 500 P ratio 30, the earnings yield is around 3.3%, which is lower than the 10-year US Treasury. However, if there is a shock that would be catastrophic on everything and all the benefits of what we enjoyed the last five, six years with the stock market doubling might revert. Therefore, when I look at interest rates, I see low interest rates as a risk if it ever reverts and higher rates as value because you can have four recessions with rates close to 20%."
The speaker discusses the impact of interest rates on financial assets, highlighting that while short-term expectations may lean towards lower rates (around 2%), the long-term outlook is challenged by inflation. The commentary underscores the risk if the current low-rate environment reverses, potentially leading to catastrophic market impacts, and stresses that higher rates could signal value amidst significant recession risks.
Campbell's stock underperforms due to poor capital allocation in a declining sector
"However, we have to make a distinction between food, corn, soybeans, fertilizers, things like that, and food brands that are in a highly competitive environment. Campbell's has great cash flows but reinvests them in a bad sector trying to survive, unlike Buffett who reinvested differently after acquiring Berkshire. I'm seeing here acquisitions totaling 1.8 billion, 6.7 billion, and 2.5 billion, while the market cap is lower than what they spent, indicating a misallocation of capital. In the end, I think it's best to leave this to pension funds as I have put it on the quadrant around 6% and I will not follow it."
The speaker critiques Campbell's stock by highlighting that despite strong cash flows, the company's reinvestment in a declining, highly competitive sector has led to poor capital allocation. The acquisitions have exceeded its market cap, underlining a structural issue that diminishes its appeal for active investors, and suggesting that it is more suitable for defensive positions held by pension funds, especially with no near-term catalyst to drive significant upside before 2030.
2026 Value Investing Macro Commentary
"So when you're looking at those foreign things like that, that's all momentum. If the US crashes, that will crash even worse. And the yield 1% 2% is ridiculous in both cases. So focus on value is my message for 2026."
The speaker criticizes momentum-based foreign investments amid potential US market crashes and emphasizes a focus on value investments that promise returns above 10%. This commentary reflects a long-term, conservative investment approach for 2026, underscoring the importance of stable, high-quality yield over low-yield momentum plays.
Skepticism on Buyback-Driven Stock Price Increases
"Now when it comes to the bottom line I think it is price manipulation so that the management gets their shares they can sell the options things like that. Nobody thinks in true long-term value creation. Maybe not even nobody thinks. They are simply not incentivized. Everybody wants stocks to go higher no matter the long-term cost of it. And therefore, I'm here arguing stupidly, sounds stupidly, only 1% of the market will get me, even if that's just Warren. However, if we have a recession, a crash, the changing of this everything bubble, the changing in the debt cycle, all these buybacks will be purged away and then the true value will emerge."
The speaker is critical of the widespread use of buybacks, arguing that they serve as a form of price manipulation benefiting management rather than long-term investors. He highlights that most buybacks occur at high prices and ultimately result in value destruction, warning that a market downturn could purge these artificial boosts.
Macro Warning on Unsustainable Market Valuations Ahead of 2026
"I would not be surprised to see the market at 8,500 in 2026 and even 10k in 2027. However, there is a tiny risk. This is all unsustainable. We have seen similar patterns in Japan in the 1980s. We have seen similar patterns in the 1990s that already discussed that has ended terribly. Real returns are very very negative here and now all the money goes into the United States."
The speaker warns that despite current market rallies, history shows that unsustainable market flows and overvaluations can lead to severe corrections, drawing parallels with past bubbles in Japan and the 1990s.
Macro Insight on Accumulation and Compounding
"And perhaps the key factor is if a stock that Buffett liked fell in price, he happily bought more, which is not at all how most people feel when their stocks decline. And that's the accumulation of wealth versus the money illusion perspective of wealth everybody has. When the stock goes up, you want to own more. As the S&P 500 goes up, the companies spend more and more on buybacks and you own a smaller and smaller fraction and you invest more money and you get less. If stocks go down, you invest money and you get more and more and more. That's so simple but so hard to comprehend."
The speaker emphasizes the importance of buying more during market dips to increase ownership and benefit from compounding over the long term. This macro-level insight reflects Buffett's strategy of accumulation when valuations are attractive, contrasting the typical investor behavior of anxiety during downturns.
ADM Dividend Commentary and Absolute Value Trade-off
"For example, the beginning of the year I bought I discussed ADM which was relatively cheap and the stock did okay from those lows. The dividend was closer to 5%, now it's 3%. The stock is a little bit higher. Had its peak here. However, maybe here it was at an absolute better with the dividend yield 5% inflation growth another 5%."
The speaker reviews an earlier investment in ADM, noting that while the stock performed reasonably well, its dividend yield dropped from 5% to 3% as the stock price increased. The commentary suggests that, despite this change, the absolute value, calculated on dividend yield plus inflation growth, may still offer an attractive risk/reward profile for value investors.
Macro Commentary on Bitcoin's Valuation Extremes and Utility
"However the key issue is that if Bitcoin ever gets to a million or even a billion nobody will be happy about it because however you look at it Bitcoin is just a gambling tool. It's a gambling tool that consumes a lot of energy and you compare it with all other financial transactions, the friction there, the cost there, it's cheaper with other tools and likely those tools will get cheaper and cheaper. However, this might get more expensive and more expensive and then again if it is the ultimate value then nobody transacts with the ultimate value. You hold that value but for it to have value over time it should be also used."
The speaker questions Bitcoin's viability as a reliable currency, arguing that even if its price reaches astronomical levels, its fundamental use as a transactional asset is compromised by high energy consumption and inherent friction. This macro commentary suggests that extreme valuations may indicate systemic financial breakdowns rather than genuine long-term value.
Evaluating Energy Investments Based on Returns
"Now, here is energy thesis. Yes, demand for energy will grow, will keep on growing. However, the question when it comes to investing is what price are you paying because the growth will always be unlinear and then you have to ask not about the trend you are nailing or not about the return on invested capital in those trends. That is the key you have to understand. Bircher hataway has energy burkshire hataway energy and they are investing only when the return is above 8 10%. They are not making investments when it is lower."
The speaker outlines a thesis for energy investments, emphasizing that while energy demand will continue to grow, investors must carefully consider the price they pay and ensure a sufficient return on invested capital (above 8-10%) before committing capital. This macro perspective highlights the importance of return metrics in capital allocation decisions within the energy sector.
Alibaba's Future Cloud Competition Risk
"Great comment here on Alibaba. I said it's an AI stock and the response was it is a cloud stock and they are building the infrastructure of the future. I cannot disagree on that. However, I'm just wondering who will be able to build the same cloud five years from now. Will there be competition? I have no idea. So, I'm just saying for me it's risky and I see a lot of players building it around the world. For now, it's going well."
The speaker discusses Alibaba, contrasting its portrayal as both an AI and a cloud stock. While acknowledging the company's role in building future infrastructure, he expresses uncertainty about its ability to maintain a competitive edge in cloud services over the next five years, labeling the investment as risky amidst increasing global competition.
Berkshire Hathaway Valuation Caution
"If you look at Birkshar's equity, it went over the last 20 years from 92 billion to 700 billion. That's huge growth over time. Can Berkshire go bust? No. There is 382 billion of cash. With that, you cannot go bust. Which means they will keep on turning on those 45 billion per year, adding to the equity no matter what. But now the key question is price. What is a good price? What is a great price? What is an overextended price for a great business like Birkshirie? When it comes to Birkshirie, Buffett is not doing buybacks. That means that the price is overextended. That means that you will likely get an okay return. I estimate around four or five% from Birkshirie going forward."
The speaker reviews Berkshire Hathaway's impressive long-term equity growth but expresses concern over its current overextended price, noting that the absence of buybacks could limit future returns to around 4-5%. He suggests that alternative businesses with faster compounding may offer better opportunities, highlighting the importance of assessing valuation before investing.
Welltower Dilution Concerns Dampen REIT Appeal
"Welltower announces transformative new era to maximize long-term shareholder returns. Well tower announces 23 billion of transactions. Then I look at well tower and they have been growing till 215. Then they have stagnated. Then I look total shares. Total shares have been a 10x issued. So they are just issuing shares for capital."
The speaker criticizes Welltower by highlighting its aggressive share issuance and stagnant growth following a period of strong performance. This dilution strategy undermines shareholder value and contributes to an unattractive investment environment within the REIT sector.
Macro Caution on Long-Term Bond Exposure
"When you look at the fixed income market, the small yields don't justify risking currency fluctuations. Plus, we all know that they're going to print more money. So, it's unlikely that the long-term exposure to bonds will give any value. It's better to have zero exposure to that."
The speaker highlights that the fixed income market's low yields are not worth the currency risks and continual money printing, making long-term bond holdings unattractive. He suggests a cautious approach with zero bond exposure given the limited upside compared to the risks.
Macro Play on Emerging Markets for Long-Term Growth
"Good day fellow value investors. We continue with our asset class overview for 2026. And today we'll discuss the cheaper stock markets out there emerging markets. Apart from being the cheaper, there is also 4.5 billion people just in Asia still at a low level of economic development compared to the US and Europe. Therefore, growing at 5% per year. So, you have growth, population, youth, low valuation. What else do you want when it comes to investing? You should sell whatever and buy emerging markets. However, that story has been there for the last two decades and only those that invested in 2003 when I started and I rode this train that was great have made true money."
The speaker presents a macro commentary advocating for a shift towards emerging markets due to their low valuations and strong growth potential driven by demographics and economic fundamentals, despite risks such as high fees and geopolitical uncertainties. The commentary suggests that while the call to buy emerging markets is rooted in long-term growth prospects, historical performance has varied significantly for different entry points.
Warning on Exuberant Valuations and Future Negative Returns
"However, when it comes to buying businesses, if you look at the S&P 500 P ratio over the last few years, it almost tripled. So, if the SAP now is at, I don't know, 9,000 points. If we revert back to historical valuations, we are down to 4,500, 4,000 points. That is just valuation. So this exuberance led to everyone just paying for stocks whatever the price is historically. And of course you say the government cannot allow it because if interest rates go higher, real home prices fall, pension funds, 401ks fall, other financial assets."
The speaker highlights that the S&P 500 price-to-earnings ratio has nearly tripled compared to historical levels, suggesting that current market exuberance may lead to negative real returns over a decade. The commentary ties high valuations to potential risks such as falling home prices and pension fund losses if interest rates rise.
Buy ASML on a Semicyclical Downturn
"Let's start with the top of the European stock index. We have discussed ASML already a few times here on the channel. better to buy it at a semis cyclical downturn when the market is not exuberant which gives you a better risk and reward situation because the fundamentals are likely there that ISML will hit its revenue and growth targets."
The speaker recommends buying ASML during a semicyclical downturn, arguing that lower market exuberance provides a favorable risk-reward balance. He emphasizes that the company's fundamentals support its revenue and growth target achievement, making it an attractive trade call.
Bullish Macro Scenario: Stocks Rise with Lower Rates
"But let me immediately start with the bullish scenario for 2026. What can push the stock market higher? And there are plenty of things that can do that. The Fed politicians want lower rates. Lower rates help the stock market. financial assets has been so for the last 15 years. Therefore, the best protection is to own businesses that have pricing power no matter what the Fed does. And that's why stocks go up. If we look at interest rates over the last 40 years, those have been going nothing but down, just shortterm peaks. And immediately, as soon as the Fed peaks, it has to start lowering rates and did that. So already before the pandemic crisis, what have stocks done over the last 40 years, stocks have gone nothing but up for a total S&P 500 return with dividends reinvested of 12.11% over the last what's that? Almost 45 years. 10,000 initial investment grew to 1.5 million. So stocks only go up if rates go down."
The speaker outlines a bullish macro outlook for US stocks in 2026, emphasizing that lower interest rates historically drive stock appreciation. He supports his view with historical data showing consistent S&P 500 growth fueled by rate cuts, making the case for investing in companies with robust pricing power.
Long-Term Value Play in SAP with Attractive Valuation
"I'll keep doing what I've been doing the last eight years. SAP is 15%. I'm also there with a P ratio of nine versus the 30 of the S&P 500. So, I'm not against the market. I just don't want to risk my wealth on the orange man lowering rates."
The speaker emphasizes his long-standing commitment to value investing by highlighting his portfolio allocation to SAP, citing a favorable P ratio of nine compared to the broader market's 30. He underscores the importance of sticking with fundamentally strong values and avoiding excessive market risk, especially amid concerns over policy moves.
BYD: A Long-Term Value Investing Example
"But a great example of BYD their investment how it went down more than 50% six or seven times once even 80% but they stuck to it invested in it for more than 30 years and did really well with that."
The speaker uses BYD as an example to illustrate the merits of value investing—despite severe drawdowns, the long-term hold rewarded investors. He emphasizes the importance of patience and maintaining a margin of safety in challenging market conditions.
Greggs Operational Resilience Amid Market Challenges
"They are still good relative performing. And we have also discussed this with Domino's. That's the situation in the UK. You can't fight the market, but if you're still doing okay, it means you're doing okay. The profit bridge down on cost inflation up on like forl like sales growth. So that keeps things stable for a while. If this growth disappears, that would then significantly hit profits. This is what maybe analysts are worried about. But they still anticipate good growth ahead, opening new stores, good capital allocation policy, growing, paying a dividend, net cash position, no debt, nothing wrong. And they have invested also in their distribution centers, wholesale, things like that."
The analysis of GRG highlights a company with stable fundamentals including consistent like-for-like sales growth and a strong balance sheet without debt. The commentary acknowledges that while temporary fluctuations and market pressures (such as inflation and margin compression) could lower earnings in the short term, the company's ongoing investments and strategic expansion provide a basis for potential long-term growth. However, there is caution as risks remain if growth falters, which might lead to further declines.
Berkshire Hathaway - Safety and Long-Term Value Proposition
"if you start looking at this portfolio, the key focus is you can't go wrong with Birkshhire because if I look at Birkshhire 1 trillion market cap, 45 billion of earnings, they will keep on growing those earnings, 380 billion of cash. You cannot lose with that over time. Therefore, this is half of the portfolio is safety and on top of it in the next crash Buffett will deploy or Greg will deploy the 300 billion buy things on the cheap and then you have more upside long term. However, average Birkshhire P ratio is between 10 and 20 depending on the situation with insurance. So at 45 billion the real value of Birkshhire is between 400 and 800 billion with the money deployed. They are now getting 15 billion on treasuries."
The speaker highlights Berkshire Hathaway as the portfolio's safety anchor due to its massive market capitalization, steady earnings growth, and strong cash reserves. They view the company as a defensive investment that offers stability even during market downturns, citing the potential for opportunistic buying in a crash while also warning of risks like valuation compression over the long run.
Macro Caution on Exuberant Valuations and Bubble Risks
"Let me bore you a little bit with the Schiller P ratio that takes into account 10 year of average earnings. And historically looking, we are just below the dotcom bubble, far higher than the roaring 20s and far far from the nifty50s of the 60s. Because when you look at investing, this is what has made investing so great in the S&P 500. And that's a Schiller P ratio of 15. Schiller P ratio 15 means 7% earnings yield, 3% economic growth for a total of a 10% return on investing that everyone is touting stocks always give that is the 10% but that 10% does not come from a Schiller P ratio above 30. That's the situation."
The speaker offers a macro-level analysis on market valuations using the Schiller P ratio. He compares current levels to historical bubbles, signaling that exuberant valuations may spell reduced future returns and an eventual market correction.
Nvidia: Stellar Numbers With Underlying Industry Risks
"if you ask me, if I look at Nvidia, all great. The numbers, the backlog, the orders, the sales, the prices, the margins, everything looks perfect. But I also know that in the semiconductor industry, when there is a boom, usually there follows a bust and all of these things can revert. Of course, whether those will revert and the stock will be at 7 trillion or not, I have no idea."
The speaker provides a stock-specific commentary on Nvidia, noting its impressive operational metrics while cautioning that semiconductor booms can be followed by busts. There is recognition of strong current performance mixed with uncertainty about long-term sustainability.
Fairly Priced Trade Call on Kimberly Clark
"So I would say okay this is fairly priced for the risk and reward however The situation tells me that Kenvu might be a better buy to get to Kimberly Clark all else equal. You get the 12% plus the dividend plus the future dividend at Kimberly Clark."
The speaker outlines a trade call based on the acquisition dynamics and dividend yield associated with Kimberly Clark (KMB). They highlight an expected 12% return if the deal closes in the next 12 months and suggest that, despite potential dividend pressure risks, the risk-reward seems fair, making it an attractive value play.
Bearish View on Diageo's Growth Prospects and Dividend Value
"Let's start by discussing Diago or I how I pronounce it badly. I don't drink so I don't know but the dividend yield is let's say okay now this would be the fair pricing of the company such a company especially because there is no real growth if I look at here it was flattish for the last few years and now given the competition the margins the let's say forcing growth they have also lost net income long-term debt that's something that is also weighing on these companies that are simply trying to let's say create some growth something but perhaps there is a structural issue there and that is that perhaps the management is drinking too much of that whiskey or whatever but brands are a little bit gone."
The speaker expresses a bearish view on Diageo, citing stagnant growth, deteriorating margins, loss of net income, and questionable management practices. The commentary suggests that even with an okay dividend yield, the lack of real growth and underlying structural issues make Diageo unattractive relative to better opportunities that could deliver higher yields.
Apple Reinvestment Delivers 10x Return
"Then what did he do with that money? He reinvested in value called Apple that then did a 10x. So if just one dividend is invested and because you invested in value because it was a downturn at that moment over the 10 years let's say it becomes a 10x that's already something we deduct the 77 we add half a million 550k to that and already everything just from one smart value investment transaction that you had the cash to do that allows you to change completely your return from 8.39 to 10.4 per year again 10.4 Sven."
The speaker highlights how reinvesting dividend payouts into a value investment like Apple can yield a 10x return over a 10-year period, fundamentally changing overall returns significantly.
Nova Nordisk Rebound Potential Amid Pharma Volatility
"Let's start with Nova Nordisk. I'll get dizzy on these. So, okay. But Nova Nordisk and this also shows what are the main mantra of retail investors often where they anchor their investment decisions on past prices. This has fallen 65% must come back and actually it can come back because if we look at the stock prices the market usually overshoots on the upside also overshoots on the downside. At some point, this crash will be overdone and then I'm sure the stock will rebound plus 50%."
The speaker elaborates on Nova Nordisk's current situation, noting the 65% drop and suggesting that overdone market corrections could lead to a rebound of around 50%. However, the commentary reflects the inherent volatility and uncertainty in the pharma sector, implying that while the upside is significant, the risks remain high.
Deckers Commentary: Overextended Valuation and Risky Volatility
"So my opinion on deckers is that this is a highly competitive environment. It has flown high, perhaps a little bit too high, and now it's back to the deck. However, we have to see, okay, where is the value? The market is crazy rational, will always overshoot on the upside and overshoot of the downside. And that is where we can find value opportunities. If I look at this, I remember also Sketchers P ratio of seven. I've been following it. And then you get this is the real value private equity. Let's say a 7% free cash flow yield. They would buy also deckers. If there is growth of 10%, I think fair value would be a P ratio of 20 not 12. So in this case maybe this was overshooting but perhaps the trend is there and now we are undershooting that trend."
The speaker provides a detailed commentary on Deckers, noting that while the stock has experienced significant highs, it may now be undervalued relative to its growth potential if normalized to a fair P ratio of 20 rather than its current 12. He underscores the competitive environment and volatility due to fickle consumer preferences, suggesting that the risk-reward profile may not suit his investment criteria.
Philips Valuation from Dutch Market
"Philips sold Ferrari and then went on to buy a 19% stake in a Dutch healthcare company, with a P ratio around 20 and some dividend yield. Although I'm not a fan of healthcare, the valuation from the Dutch market appears fairly valued, making it a potential candidate to add value to a portfolio."
This commentary focuses on Philips' strategic move in the healthcare sector, suggesting that despite personal reservations about the sector, the pricing seems fair and could offer value in a diversified portfolio.
Stellantis Valuation Caution
"The next company, Stellantis, is valued at 4 billion and its stock is going lower, which on the surface appears interesting from a value perspective. However, comments online have labeled it as a terrible company. From a risk-reward standpoint, it is risky like its automotive peers, especially with rising competition from Chinese cars, which could result in lower margins and prolonged downturns."
The speaker offers a mixed view on Stellantis, noting that while a lower stock price might suggest value, significant risks from increased competition and a challenging automotive environment warrant caution.
CNH Industrial Cyclical Bottoms
"Now a company that we discussed often on this channel, CNH Industrial, has a three billion stake with a pay ratio of 14 amid weakness in the agricultural sector. Farmers aren't buying heavy combines because of tariffs and uncertainties from the past couple of years, and we have to wait for the inventory to be reduced. When looking at the current price decline, it definitely looks ugly, but the business remains solid. After averaging about 1 to 1.5 billion in free cash flow, it could yield roughly 10% over the cycle."
The commentary on CNH Industrial centers around its current cyclical weakness, noting that while the fundamentals remain intact, the stock is trading at a bottom and may present a buying opportunity when the cycle reverses.
Ferrari (RACE) Cautious Outlook
"Ferrari stock is also a little bit in a downturn. Ferrari shares sink by most since 2016 on cautious forecast. They had this investor day and they gave 2030 guidance and it was not really some stellar guidance. Slow growth expected ahead with a little bit of growth in earnings per share and free cash flow. In the best case, if earnings come in at half a dollar, the market could see a P ratio drop to 10, pricing the stock at just five, which would be an absolute bargain."
The speaker discusses Ferrari's current struggles, pointing to weak guidance and a downturn in performance, while also hinting at a potential turnaround if earnings improve, setting up a scenario where the stock might become a bargain at a much lower valuation.
Exor Trading Discount Commentary
"Exor stock offers a very interesting situation. The market cap is 15 billion but the gross asset value is 40 billion. When we deduct the debt of 4 billion that's 36 billion compared to the market cap of 15 billion for a huge holding discount."
The speaker highlights that Exor is trading at a substantial discount relative to its net asset value, suggesting potential value due to the disparity between its market cap and the underlying asset base.
ADM at 30 is an Amazing Buy
"For example, Archer Daniel Midland just went down a little bit from this jump here. But if it goes from 56, let's say to 30, what do I do? ADM at 30 is an amazing buy. It will give you then a dividend of 5.5% that you can buy and reinvest and own more at 30."
The host identifies ADM as an attractive buying opportunity if its price falls from 56 to 30, highlighting the attractive dividend yield of 5.5% and the potential to reinvest, reinforcing a long-term value investing approach despite market volatility.
Nike Represents a Strong Risk-Reward Trade Opportunity
"Good day fellow investors. Nike already looks like a good risk and reward stock to buy now. But the question here as we are value investors is when it is an extremely strong buy with a margin of safety. We are getting closer to that perhaps even already there. If they go back to five billion from the current three billion in net income times a P ratio of 30, that's already 60% up. However, from that perspective, strong buy, we have a 2x minus 20% as the maximum downside."
The speaker outlines an actionable trade call for Nike (NKE), emphasizing its attractive risk-reward profile and margin of safety. With current net income at three billion and potential to reach five billion, the stock could see a 60% upside based on a 30 P/E multiple, while limiting downside risk to 20%. This positions Nike as a strong buy for value investors seeking both relative and absolute investment merits.
Commentary on Archer Daniel Midland's Role in a Value Hedging Strategy
"And let's immediately go to here one position here. We have exposure Archer Daniel Midland 4.5%. Now I bought this somewhere here. Now it's higher. The dividend yield was closer to 5%. Now it's a little bit lower. Another thing here to understand when you look at the percentages here when it comes to diversified portfolio a full position is five to 6% a medium position is 3%."
The speaker details his position in Archer Daniel Midland, noting that he entered the stock in the 40s and highlights the dividend yield as a fundamental hedge in his diversified value investing strategy. He explains his strategy of managing positions based on risk and opportunity, emphasizing the role of dividend yield during downturns.
Hedging with SPY Put Options
"Now, how much does it cost to hedge? If I want to protect for a year and something more, I have to pay around 40 for a put option on the spy ETF here. So, for 13 14 months, I am 5.9%. So, I buy a put and whatever happens with the market I am at zero. Of course I hope to lose those 5.5%. Because that 6% cost allows you to be 100% long with whatever you have in your portfolio. Maximum loss is 6% - that's the maximum downside your portfolio has."
The speaker explains a hedging strategy where buying a put option on the SPY ETF for about 13-14 months costs roughly 5.5%-6% of the portfolio value, effectively limiting the downside risk to 6%. This method is presented as a cost-effective way to protect against market downturns, providing a defined loss while maintaining exposure to potential market gains.
Berkshire Hathaway's Enduring Long-Term Outperformance
"Buffett underperforming. All true, but Buffett wasn't able to beat the S&P 500 total return during the past 20 years. Let's check if that is true. It is not true. Buffett destroyed the S&P 500 in the last 50 40 30 20 and not yet not yet in the last 10 years because if I look at Birkshhire return over the last 20 years your money has increased 8.1x if I compare that with the S&P 500 total return with reinvested dividends 10,000 has gone to 80,000 so Buffett has beaten or let's say equal to the market over the last 20 years."
The speaker argues that despite common beliefs of underperformance, Berkshire Hathaway has matched or outpaced the S&P 500 over the last 20 years, with an 8.1x growth in invested money compared to the market's performance. The commentary emphasizes Berkshire's strong fundamentals and suggests that, in contrast to short-term market noise, its long-term value remains compelling even amid a bubble driven by low interest rates and money printing.
Long-Term Growth Opportunity in CMG Amid Macro Headwinds
"Chipotle Mexican stock is down 50% but it is a good business and therefore this is getting interesting. I look at what Billman has to say and he is really praising the company. He has been a long-term investor. He says that they will return to growth. Actually we'll see later they are still growing and therefore this might be an interesting opportunity to invest in. So the situation is the following difficult comparables the macro environment is weakening however if you have a long-term growth focus over time that should benefit your investment. If you buy now and then for whatever reason recession, it goes down, you can then double down."
The speaker highlights that despite a 50% drop in Chipotle's stock, the company remains a strong business with promising long-term growth prospects. He underscores potential catalysts such as continued earnings growth, new store openings, and buybacks, while acknowledging current macro and comparable challenges. The commentary suggests a watchful, patient approach with the possibility to double down during market dips.
Compelling Free Cash Flow but Risky Buybacks
"I look at the free cash flow 6 billion they are using all that money six billion to buy back stocks 1 billion just capex earnings per share 7 to 10% growth this looks stellar from a value investing perspective the P ratio is 13 if just adjust to market valuation that's just a 2x quickly even more than the 52% return however when you spend money on buybacks that assume that the business will last forever and cash flows will keep growing, you might not want to let management do that. But then, with massive stock-based compensation and selling of stocks, the outlook for me is still too risky. It's more of a bet on whether the management's strategy will actually create sustainable value."
The speaker highlights PayPal's robust free cash flow and attractive valuation metrics, noting its 6 billion in free cash flow and a P ratio of 13 suggest potential upside. However, he expresses concerns about management's heavy reliance on buybacks and significant stock-based compensation, which he believes introduces considerable risk. Overall, while the numbers look appealing from a value perspective, the risks inherent in management's strategy make the stock a risky, uncertain bet.
Caution on Nvidia's AI Hype and Potential Capital Destruction
"Investors, stocks are still going up on the AI exuberance. Nvidia is up 77% over the last 6 months, but I don't fear a crash. Everybody thinks even if it crashes, then it goes higher because that's how usually stocks do, always go up. I might disagree because AI might disrupt itself. We are already seeing layoffs. You don't have just a crash and then a recovery. There is no recovery. Does only destruction and that's exorberated by the current capex and buybacks."
The speaker offers a cautionary view on Nvidia, highlighting its recent impressive gains amid the AI boom while warning that the current exuberance and high capex and buyback activities might lead to capital destruction rather than a smooth recovery.
Cautious Outlook on Amazon Amid Investment Concerns
"Amazon great earnings growing but I cannot forget a few years ago when the downside was minimal the upside was 2x it's now even 3x from that price when we made this risk and reward video next time if this happens I might buy it again now it is here on the risk and reward nothing bad with Amazon great business great growth 14% overall everything good operating income growing free cash flow however down on the huge investments and we don't know what will that investment bring because if we look at the profitability of this cloud and everything yes it's growing but the profits not that fast and the competition there is fierce."
The speaker acknowledges Amazon's strong earnings and business performance, but expresses caution regarding its heavy investments in cloud computing and the uncertain pace of profitability improvements. He implies a willingness to buy again if conditions become more attractive.
Buy Amsterdam Commodities for Value Exposure
"And now we can go to the best buy here on my YouTube quadrant for me, Amsterdam commodities. And you can see here, this is my model research platform portfolio. And that position is at 3.75% of the portfolio. Perhaps I should have been a little bit bolder when the stock price was lower, but I might still add that these prices because the fundamentals are really great. 5.5% yield P ratio of 10. It is an essential business. Spices, seeds, organic tea, food solutions. They have nailed the previous strategic objectives with 8% EPS growth over the last 10 years."
The speaker identifies Amsterdam Commodities as the best buy in his quadrant, highlighting attractive fundamentals such as a low P/E ratio, robust dividend yield, and consistent EPS growth. He notes that while a lower entry point would have been ideal, the current price still presents value for long-term accumulation.
Berkshire Hathaway Overvalued; Wait for a Dip
"Berkshire is overvalued and I keep telling people it is a great business, one of the best business, potentially one of the best investments you can ever make because all the bitcoins and things like that will go to zero. there is no business risk. It will keep on compounding, but now it is pricey because the P ratio is in the 20s and usually it's better to buy closer to the tense. Does that sound crazy? Well, if you really want to patiently wait for an opportunity to buy Berkshire at a fair price, wait for recessions, I don't know, insurance disasters, hopefully not things that are ugly and then you can find it cheaper."
The speaker notes that although Berkshire Hathaway is fundamentally a strong compounding business, its current high valuation—with a P ratio in the 20s—makes it less attractive. He advises waiting for a recession or specific negative catalysts, such as insurance losses, to buy at a fair price.
General Mills Margin of Safety Concerns
"When do we hit value with General Mills stock? It's going down. The fundamentals are stable. And we just had an investor day conference discussing how they're going to go back to growth and all their brands, the Cheerios, and how the consumer wants easy access to quality food they trust. However, we must also compare that to the market cap. That's a 9% free cash flow yield. And if I look at the dividend and if I look at the buybacks, the 3% difference between six and nine dividend plus buybacks is reinvested for that growth for marketing. Thus, the real free cash flow yield of General Mills is 6% and that's not enough for private equity. If you want a margin of safety, they want 10% on these risky turnaround bets."
The analyst criticizes General Mills, noting that its 6% free cash flow yield falls short of the 10% margin of safety desired for risky turnaround bets. Despite stable fundamentals and potential catalysts, stagnant consumer demand and competitive pressures raise concerns about its valuation in a turnaround scenario.
Avoid buying Stellantis due to quality concerns
"Stellantis is a dead company, an empty shell. I wouldn't take stantis for free. Not a good idea to do it now. They're a company run by accountants. Worst quality cars you can ever try. Supply chains short report on them. It's ugly, ugly, ugly."
The speaker explicitly advises against investing in Stellantis at the current moment, criticizing its management, product quality, and overall operational execution. The commentary emphasizes caution despite any seemingly attractive valuation metrics, labeling the company as fundamentally flawed.
Domino's Pizza Group Shows Stability Amid UK Market Slowdown
"Let's start with Domino's Pizza Group. This is UK and Ireland. So they have the results and sales are flat. Free cash flows are down a little bit. Iita down, earnings per share down, but everything is still very profitable. There is still cash flow. There is still underlying IITA. So nothing wrong with it. Just a market decline, a slowdown in the UK, likely inflation is hitting them as it is doing on the customer globally. Margins a little bit down, earnings per share down 29% that's always the most volatile factor, but the free cash flows are there and they have done over 500 million in dividends and buybacks."
The speaker analyzes Domino's Pizza Group in the UK and Ireland, noting flat sales and a decline in EPS by 29% while still generating healthy free cash flows, dividends, and buybacks. Despite short-term market pressures and inflation impacts, the business fundamentals remain intact, suggesting stability in a downturn.
Nvidia's 4x Upside Potential Based on 40% Growth Projections
"There was this great comment on my efficient market hypothesis video. How Nvidia is perhaps the best value investment out there because if the growth targets are reached, we'll have a PE ratio of seven in 2030 and that is absolutely correct. Plus, if they keep on growing 40% per year, the P ratio in 2030 will not be seven, will be at least 30, which is equal to the S&P 500, which means Nvidia offers a 4x potential."
The speaker highlights Nvidia's potential as a value investment, projecting a PE ratio of seven in 2030 if the company sustains 40% annual growth. This scenario implies a significant upside of 4x on the current valuation, supported by detailed growth and valuation metrics. While risks and potential rate declines were noted, the overall trade idea emphasizes Nvidia's dominant market position and growth catalysts as compelling investment drivers.
Tesla Compared Favorably Against Peers
"Similarly, Brookfield they are pushing for 14% growth in the next five years in their presentation. Nvidia is pushing 40%, we'll discuss that in the next few days. Nvidia is just a 4x compared to Tesla 6x. So Tesla is a much better buy. And that's the world we are living in a world of promises, not profits."
The speaker contrasts Tesla with peers like Brookfield and Nvidia, emphasizing that despite higher growth numbers from others, Tesla's 6x return projection makes it a superior buy in a market driven by promises rather than current profits.
Tesla Trade Call for 6x Upside
"Good day, fellow investors. I came across this post showing how Tesla has destroyed the competition when it comes to new electric car producers. And Tesla actually reached 20 billion of free cash flows. The next step is to bring it to 8.5 trillion in market capitalization for sixx on your stock price on your investment. And there is no arguing that Elon Musk is a genius and therefore if he delivers again it will be great. If he achieves that, you will make your 6x."
The speaker highlights Tesla's superior performance in the electric car sector and projects that, through continued success and Elon Musk's execution, the stock could achieve a 6x return. The rationale is based on Tesla's free cash flow achievements and ambitious market cap targets, aligning executive incentives with shareholder upside.
Avoid holding ENB due to high debt risk
"I would have thought here that they would work on lowering the debt a little bit so all that growth is based on a 50% increase of debt and that is again issue I never liked that much that if there is growth but with that it means there is no growth. It"s like the US government they all say economy is growing at 2%. Wow. Wow. But with 7% deficits your economy is declining at 2% per year. No matter what everybody tells you, if I see here 50% growth in debt and I don"t see that reflected in higher than 50% dividend growth, then the story doesn"t add up, which means the risks go higher. I hope nothing bad happens, but I wouldn"t hold this."
The speaker expresses caution regarding Enbridge (ENB) due to its high debt levels. He argues that if the increase in debt is not matched by appropriate dividend growth, the stock becomes too risky, and he advises investors to avoid holding the stock.
Tesla Valuation Raises Red Flags
"I mean, if you research this, then you can say, okay, it s impossible to research. And now look at the price is just going up. It s crazy. Tesla has a market cap of 1.4 trillion. The total cumulative profits in the last 15 years was 25 billion. This is all the money Tesla made. So yes, it doesn t make sense to make any research."
The speaker criticizes Tesla s valuation by juxtaposing its enormous market cap with comparatively meager cumulative profits, implying that the price action is detached from fundamental realities. This company-specific commentary suggests skepticism toward Tesla s current trading levels.
Trade Call on Stellantis as a Cyclical Opportunity
"I think we are cheap enough. So you can buy now and then you buy again if it goes down 30 40% you sell regain your position back then when it comes back because it should be cyclical. It has a lot of cash. It will survive."
The speaker presents an actionable trade call on Stellantis, suggesting investors initiate a position due to the stock appearing undervalued amid cyclical lows. Although acknowledging the inherent risks of a down cycle and negative cash flows, the speaker believes that a rebound in cyclical momentum can yield substantial returns, potentially as high as 50%. Their strategy involves buying now, selling on a major dip, and re-establishing the position, contingent on cyclical improvement.
HPQ Watch List: Eye on a Potential Small Position
"s say, impact its margins and inventory and everything. There is that and that is therefore the key risk. So not crazy exposure but interesting exposure could be something to watch. We have put it here on the quadrant and will watch it over time and you never know when the opportunity knocks. Of course everybody would love 20% growth stable but at the end it"
The speaker highlights HPQ's strong free cash flow yield and steady fundamentals as a reason to keep the stock on the watch list. Although acknowledging downside risks such as potential recession impacts on margins and inventory, the speaker suggests that investors consider starting a small position and doubling down when a clearer opportunity arises. The overall tone is cautiously optimistic given the company's long-term structural trends.
Google Stock Appears Risky in Diversified Portfolios
"Google now is a little bit risky. I hope it was bought earlier but the rest is perhaps even more on the aggressive side."
The speaker offers a cautionary note on Google within highly diversified portfolios, suggesting that if investors purchased Google at a lower valuation, it might now be too risky given its aggressive positioning relative to other holdings.
Oracle Shows Robust Cloud Outlook amid Bubble Concerns
"Oracle is giving its strong cloud infrastructure outlook from a dozen billion they will make 150. Wow. So huge growth. Just the bookings on their cloud deals plus 300 billion because OpenAI said we'll spend 300 billion with you. They made 12 billion this year. So huge projections."
The speaker highlights Oracle's bullish cloud business with impressive revenue projections and growth catalysts, though it is mentioned within the broader context of a potential bubble. The emphasis is on Oracle's strong cloud bookings and the massive spending commitment by OpenAI, suggesting robust near-term growth despite overall market exuberance.
Equinor as a Steady Dividend Play
"However, we have also discussed fundamental businesses in the quadrant video. Equinor 8.6% dividend pretty stable low costs. So that's also something you can rely on 8% every year."
The speaker highlights Equinor as a defensive, fundamental business offering an attractive dividend yield of 8.6% along with stable low costs, suggesting it as a reliable long-term investment option that provides about 8% annual yield.
Hedge S&P 500 Exposure with Protective Puts
"if you must stick to the S&P 500, you can use 5% of your wealth to buy a put. So you limit your downside to 5% and you stick to the upside of 30%. That's a positive risk and reward scenario with certainty. Just look at the puts here. You can just protect yourself for 14 months. This is December 2026 with a total put and forget about it."
The speaker advocates for hedging S&P 500 exposure by allocating 5% of one's portfolio to protective put options, which limit the downside to 5% while preserving a potential 30% upside. The strategy is presented as a defensive, risk-managed tactic that ensures certainty in long-term compounding.
Conditional Buy Opportunity on Vail Resorts for Attractive Dividend Yield
"Good day fellow investors. A stock that has done terribly over the last few years is Veil Resorts. The ski resort stocks. Let's look at the business, the financial, the value, the quadrant, and whether it fits maybe your portfolio. So for 141 for the stock price just on that expecting the dividend to grow a little bit over time to be at a yield of 5% over time and perhaps there will be two good years of snow and skiing and it will be trendy again and then you can also maybe get capital gain but we are close to a 9% likely return from the stock if we are more exuberant and they managed to grow the dividend 5% over the years. For my personal portfolio I would need it to be another 30 40% down to consider and diversified. If it goes down 20%, I might consider it good yield, good business over time."
The speaker discusses Vail Resorts, noting the company has faced challenges over recent years but offers an attractive dividend yield of around 5%. He calculates a fair value near $141 based on dividend growth assumptions and a potential total return close to 9% if conditions, including improved snowfall and dividend growth, materialize. However, he remains cautious and indicates he would only consider buying if the stock drops around 20%.