january 3, 2016
HOW TO DRAMATICALLY IMPROVE YOUR RETURNS FOR 2016
Part 1 of 2
If you were not born a natural investing genius like (apparently) Warren Buffett, you have probably made your share of mistakes since you began buying and selling stocks. It's okay to make investing mistakes, of course. You are a human being and prone to all the classic cognitive and behavioral errors that humans make when dealing with money, a result of our evolution from barefoot hunters of food-prey to button-down hunters of investment-prey.
Unfortunately, we still carry all of the innate biases and mental heuristics that served us well when we lived in caves and hunted in jungles. However, now that we are hi-rise office-dwellers jockeying 23" flat-screens and wireless keyboards through financial hyperspace, these subconscious tendencies regularly sabotage our success. Perhaps the worst part is that we are rarely aware of it occurring. Fortunately, there is a method to avoid these common investing misjudgments, reduce your losses and dramatically improve your performance.
In this 2-Part article, we will show you an approach for selecting investments that will help you evade the most common errors that invariably result in losses for the majority of investors. You'll learn how to avoid buying high and selling low. Instead, we will show you a way to purchase investments that are almost sure to make a profit, and you'll even eliminate the increased risk that most academics believe is required to produce higher returns.
To accomplish this objective, you will have to break some nasty habits and learn to shun the 'conventional wisdom.' This can be much harder than you imagine, but if you're willing to follow the steps outlined below, then this article could be the spark that launches a new, more productive path toward your financial goals. The result is potentially much higher returns, a more rewarding investing experience, and substantially more money for you and your family's future.
First let's look at the typical way most people approach investing…
'TIS THE SEASON TO MAKE GUESSES
2016! A new year has dawned. This is traditionally the time of year for reflection on the past and resolutions for the future. It's also the traditional time of year when various Wall Street advisors, brokerage firms, business magazines, and 'gurus' with a kaleidoscope of investment approaches make predictions about what they think will happen in the coming 365 days.
After all, everyone wants to know the future, and the Wall Street money machine is more than happy to accommodate them. It is Wall Street's job to predict the future of the economy and which companies will be winners, right?
If you watch the business TV channels, read any of the many thousands of investment blogs/websites, or pick up a business or money-related magazine, prediction of the future is the activity in which most of them seem to be engaged at any given time. The desire to know the future is not new. Since history began to be recorded, we can see evidence of people wanting to know what will happen tomorrow, next week, or next year.
However, you will not find that here. IntelligentValue is unusual in that we are not preoccupied with fatidic speculation. We can’t predict the future. If it could be predicted, fortune tellers would win all of the lotteries. They don’t, we can’t, and we are not going to try to. We know that it is impossible to predict what is going to happen tomorrow, next quarter or next year. Our investment-advisor crystal ball may be broken, but for us, prophecy has never been a winner.
The truth is it has probably never been a winner for anyone else, either. However, as soon as any of the dozens of 'gurus' featured daily on CNBC or other business cable-TV channels makes a prediction, it is quickly forgotten and onward to the next prediction. Rarely if ever is there an analysis of the accuracy of past predictions. This endless fascination with predictions of the future for an industry, company, product, economy or market is such a terrible waste of time and money!
#1) The first rule of investing success for 2016 is to avoid predictions. Turn off CNBC and make a consistent and conscious effort to avoid any information source that involves speculation about the future.
A COMPLETELY DIFFERENT APPROACH TO INVESTING
There is a viable and proven alternative to investing based on predictions of future earnings or stock prices. We believe investing must be approached primarily as a scientific problem. By their very nature, scientific problems are challenges that the application of human insight, advanced mathematical algorithms, and modern technology are well suited to address.
While Warren Buffett claims that he does not use a computer in his decision-making, we (and dozens of successful billionaire individual investors, hedge-fund managers, and private equity partnerships) find that utilizing a scientific approach, aided by readily available modern technology, is a consistent winner.
#2) The second rule of success is to approach investing as a scientific problem that can be solved.
As a scientific problem, we form multiple hypotheses of potentially profitable approaches for investing and convert those hypotheses into language a computer can read through the use of algorithms. Over the last 15 years or so we have tested thousands of approaches and variations to those approaches to determine 'what's working now.'
An important point to recognize is that 'what's working now' changes throughout the course of a business cycle. For example, in March 2009, our market timing system identified that the market was at a bottom, and we knew that the most profitable investments would be quality, yet deeply beaten-down, undervalued companies. Value approaches worked incredibly well in that pivotal year, with our two model portfolios producing returns of 1600% and 700%, respectively.
Value continued to work well until 2014, when the market began to hit excessive levels, and undervalued stocks had virtually disappeared. This was especially true in the small-capitalization arena, which has historically been good hunting grounds for undervalued stocks. As the market seemed to top and move sideways in 2015, our scientific testing of different hypotheses showed that ETF's may be the only profitable way to invest, at least for the foreseeable future.
Our analysis shows that conditions are ripe for a severe correction or possibly even a more serious deflationary, deleveraging-based selloff. While many believe the credit crisis in 2008 was the beginning of a deleveraging cycle, the fact is that debt has significantly increased in the ensuing eight years. We may see all that debt begin to unwind in the near future.
This doesn't mean we have to hide our heads in the sand. In a correcting/falling market, ETFs allow investors to profit from using inverse products, defensive sector ETFs, bond ETFs, or defensive asset-class ETFs. We believe that 2016 will be another pivotal year, and profits for those invested in the correct direction, in a business-like fashion, and without the fear that is overwhelming others, can be outstanding.
Of course, there is no guarantee that any given approach will be profitable, but we increase the probability of success by embracing a proven strategy for the appropriate conditions rather than trying something new based on our gut instincts. Surprisingly, 'gut instincts' is the way a large number of investors play the market. For many people, investing is akin to a weekend in Las Vegas with all the same highs, lows, and adrenaline rushes with every trade that people get when rolling the dice. This brings us to the third rule for success:
#3) The third rule of success is to approach investing in a business-like manner.
Our approach is to treat investing as a business; to limit risk and embrace opportunities for profit without emotion; in an objective and as thoroughly rational approach as possible. To accomplish this, we use a specific set of tools to analyze different aspects of the economy and the market and establish whether it is appropriate to be in the market long, short, or to stay out.
We analyze the macroeconomic environment using a set of indicators that are proven to mark business cycle changes in real time. We employ computerized screening criteria to identify opportunities, ranking systems to order those opportunities from best to worst, then establish buy and sell rules to enter and exit trades at the optimum time without emotion. Testing new ideas based on instincts is not something we do with our money, and you shouldn't either. Established, proven approaches should be all you consider, especially in times of market tumult. Here are the proven approaches we use:
THE BENEFITS OF TREND FOLLOWING
#4) The fourth rule of investing success is to follow the trend. Trend following can be applied to economic conditions, market levels, sectors, industries, and individual stocks or ETFs.
We start by analyzing the current economic and market conditions to determine if there are clear trends at work. The over-arching theme of whether the economy his growing or contracting determines which investment products will be most profitable in any given period of time. The second level theme is sector trends, followed by industry trends and finally individual position trends (stocks or ETFs). When we are able to identify all the trends lining up favorably, that is when home runs can be hit!
This strategy differs from the approach of most brokerage-based analysts because each is assigned a different set of companies to examine from a bottom-up approach. Certified Financial Analysts are trained in the fundamentals of stock analysis and not much more. Less than 1/10 of analysts include the overall economy in their research of a company or its sector and less than one in 100 apply technical analysis to their examination of a company's stock.
Our objective in using an approach starting with a top-down analysis is to institute investment strategies that profit from the direction of the dominant force (trend). We believe this is the appropriate approach for successful investing, rather than guessing what will happen tomorrow, next week, next quarter, or next year with an individual company (which is what most of the 'experts' on TV are doing).
“Trend following is data driven, not news driven. It’s based on actual market prices that determine profitability, not interpretations and analysis. So, when executed correctly, it’s immune to the politicking and herd mentality of Wall Street, CNBC, and other opinion influencers. When the data says buy, you buy. When the data says sell, you sell.” —Michael W. Covel, author of 'Trend Following: Learn to Make Millions in Up or Down Markets'
As an example, we can quickly identify the trend of large-capitalization stocks with a seven-year chart of the S&P 500 index (below). It's easy to see when we step back and take a 'big picture' view of this index the trend is definitively higher; after all, the price chart is moving from the lower-left to the upper-right! There have been some periods during the last seven years when the S&P 500 moved a little bit too far above its trendline, then returned downward in frightening rushes. However, it never dropped much below that trendline (save for a few, scattered weeks of overselling in 2011 and in August and September 2015, as shown below).
The S&P 500 is still on a clear, upward trajectory and shows no signs of danger in this 7+ year chart.
Based on this basic analysis, the trend is obviously higher. Does this mean we should invest 100% of our funds in long, large-cap equity positions? No, it's not quite as simplistic as placing all of our 'chips' on black after black has been a winner for the last seven spins. Obviously, the statistically logical choice at the roulette wheel in that situation would be to put your chips on red.
With today's stock market, it's actually not much different from that gambling-based comparison. The market has been climbing for almost seven years when the statistical average length for bull markets is 4.5 years. We know from prior analysis that there are also multiple data points showing that the end of the bull market may be at hand. For this reason, we always do further, detailed reviews of the status of a trend before making an investment based on a quick look at an up-trending chart. Our goal is to catch trends as they are just beginning, not after they have been established for seven years.
AVOIDING EXTRAPOLATION ERROR
For the reason discussed above, the one caveat that we must always keep in mind after identifying a trend:
#5) Rule number five is to avoid extrapolating current conditions too far into the future. Extrapolation into the future is frequently called 'recency bias' by behavioral economists and is a common mistake made by many investors and trend followers.
Recency bias is the tendency to draw conclusions about the future behavior of an investment from the recent past. This leads to investors chasing performance and subsequently buying high and selling low. When a stock or fund goes on a streak of high returns, amateur investors tend to start buying when a lot of noise is being made in the popular press about the impressive gains of the market. This occurred in the late 90's with the Internet bubble and in the mid-2000's with the housing and stock market bubbles.
Not wanting to miss out on the action (herding bias), people bought the hot stocks without knowing much about what they were doing. Inevitably, that is when the hot streak goes cold. Professionals start shorting those names when they see a momentum stock get too hot from an influx of amateur money chasing past performance. The most recent two incidents of this in the US occurred during the Internet stock craze in the late 1990's and the housing craze in the mid-2000's.
When the market starts to head down, many investors then have another bias called 'anchoring,' that sinks them even further. During decision making, anchoring occurs when individuals use an early piece of information to make subsequent judgments. With an investment, that initial piece of information is usually the cost of the stock or ETF. Many investors hold on to a losing position, hoping it will turn around and profit, but ultimately end up selling when the pain gets to be too much. Frequently, this capitulation occurs just before the bottom. It is a sad story that has been repeated over and over for as long as markets have existed.
(Note: For those interested in learning more about investor biases that cause investment losses, please see our blog post, "22 Biases That Will Cause You to Lose Money When Investing." For more in-depth material, we recommend Nobel Prize in Economics winner Daniel Kahneman's excellent work, including his best-selling book, "Thinking Fast and Slow.")
However, even with clear knowledge of these biases, they are ingrained in our subconscious, and it is still difficult to overcome them. Savvy, seasoned investors are aware of these common biases and use them to their advantage. How can they overcome these ingrained human biases? They realize they cannot – so instead, they utilize computerized, rules-based investment strategies to make their investing decisions for them. Most know that if they override the computer's decisions (programmed with the investor's well-tested strategies), the result is almost always worse because our human biases have taken over.
To avoid extrapolation error, we apply a few additional analyzes before making an investment.
REGRESSION TO THE MEAN
It is important to keep in mind that trends can run to extremes and become over-extended, either to the upside or downside. Overbought/oversold conditions occur not just in a company's stock price, but in its sales, earnings, profit margins, PE ratios, and many other fundamental factors. In a free market economy, most competitive advantages a company may obtain are short-lived. Competitors quickly see a profitable success story and enter that market, able to reproduce the product at a lower cost because they didn't incur the up-front development expenses.
There are very, very few companies with impenetrable, competitive-advantage 'moats.' These opportunities used to exist with more frequency in earlier times, but in today's hyper-competitive market, with millions of investors scanning computer screens looking for a Buffett-style 'moats,' their stock price quickly becomes too rich – or the company's competitors erode the moat. Other times, technology changes the market for a business with a moat. For example, Buffett used to buy newspaper publishers such as the Washington Post because newspapers had a virtual monopoly in their city for advertising, but where are newspapers today? They are going the way of the buggy whip.
A classic example of a company that consistently achieves innovation-based competitive advantages that are followed by relentless knockoffs by competitors involves the most valuable company in the world (by market cap). Of course, we are referring to Apple Inc (AAPL) and its Korean copycat cousin, Samsung. Apple regularly develops many new innovative products that are massive hits (think iPod, iPad, iPhone, and all of their updated iterations). These products are quickly copied and reproduced by companies like Samsung, using cheaper components and selling for a lower price.
For this reason, mean reversion applies to almost all fundamental data series when considering individual companies. If you identify a business with a high profit margin, it is very likely that margin will erode within a year (if not much less). Reversion-to-mean is also applicable to indices and ETFs when talking about composites of these same fundamental factors, which we will discuss in a moment concerning earnings and PE ratios for the S&P 500 Index.
#6) Rule number six for successful investing is to check the relative status of a trend compared to its long-term mean or median.
It is important that investors not just identify that a trend exists in a data series, but also to determine where the trend is relative to the data-series mean/average. As part of our analysis, we watch for over-extensions of trends and identify overbought or oversold situations as opportunities for mean reversion (sometimes called 'regression to trend') in a data series.
S&P 500 REGRESSION TO TREND, 1871-PRESENT
As a real-time example of a clear set up for a classic reversion-to-the-mean, consider the S&P 500 large-cap composite stock index we showed you above. While the trend of the last 6+ years is, of course, higher, analysis of the index's place in a much longer time context shows that it is extremely overextended.
The table below (by Doug Short of AdvisorPerspectives.com) shows that in 2015 the log-scale, inflation-adjusted monthly average of daily closes of the S&P 500 Composite Index reached a level of 93% above its regression trendline that spans 14 decades of market history.
Shockingly, this is a level that has only been exceeded once previously, at the year-2000 Internet-bubble high. The S&P 500 is further above its trendline this year than just before the last crash in 2007 (when it was ~80% overbought), and even greater than the over-extension of the market just before the 1929 market crash (at ~81% overbought). Even with the recent pullback, the S&P 500 still sits at 87% above its trendline:
Click to Enlarge
145-year Regression-to-Trend chart of S&P 500. In 2015, the index reached its 2nd-highest level above trend in that entire, 14-decade period.
Source: Doug Short/AdvisorPerspectives.com
Notice in the chart above each time when the market reached extremes above its trend line. You can see that following those peaks, the reversion usually went past the trend line and much lower into oversold territory, with the greatest overshoot occurring following the crash of 1929. In the early 30s, the market had dropped to -67% below trend. (Of course, investors then didn't have the advantage of looking back over 145 years as we do today to discover that stocks were a really great bargain.)
In 1982, the S&P 500 was -56% below trend before beginning the longest, most robust bull run in history. However, following the selloffs in 2000 and 2008 the market dropped to only -14% below trend, and that was for a relatively brief moment that can be seen only as a narrow line (just to the left of the 2010 line) in the 145-year chart above.
S&P 500 WILL NEED TO DROP 60% BELOW TREND TO BE 'AVERAGE'
Following extreme selloffs in the past, the PE of the market typically drops below 10, down to PEs of 8 and even 6 before starting to climb higher, based initially on the purchases of deep-value investors. However, in 2009, the PE of the market only dropped to the mid-teens, near its long-term average. We believe that the price excesses of the 80s and 90s that peaked in the year 2000 have never completely worked themselves off yet.
We have made the case several times in prior newsletters that a correction of the 18-year bull run of the '80s and '90s is not complete. History shows the market moved in spans of 17-year (avg) growth periods and 17-year (avg) sideways corrections for the last 200 years. For details of this pattern, see the book by Vitaliy Katsenelson, CFA and Professor of Equity Analysis at University of Colorado and Portfolio Manager with Investment Management Associates, Denver, 'Active Value Investing; Making Money in Range-Bound Markets.'
According to Vitaliy, the last sideways, range-bound market ran from 1966 to 1982. Then (those of us old enough) witnessed the incredible bull market of 1982 to 2000. The next sideways, up-and-down, range-bound market commenced in 2000 and we are still in it. With an average span of 17 years, the next bull market will begin in a year or two. However, in the meantime, to get to a PE of 8 would require the S&P 500 to sell off to about 720 – a decline of a whopping 65%!
Doug Short comments on his chart above, "If the current S&P 500 were sitting squarely on the regression, it would be around the 1098 level." According to Doug Short's analysis and Vitaliy Katsenelson's work, it will go down much further than that if it is going to hit an average of 60% below trend.
Federal Reserve and Central Bankers across the world have intervened in the free market and prevented those naturally low stock prices from occurring. What did they substitute instead of free-market profit growth to keep prices up since 2000? They substituted DEBT (in capital letters, please notice), totalling $59 trillion. However, that capability to hold back the forces of free-market price discovery may no longer be possible.
If stocks do finally sell off as dramatically as we suspect they might this year, we believe we could see those extremely low PEs below 10 once at some point again in the next few years. Central Banks across the world are simply out of bullets. With interest rates still near zero (at emergency levels) in the US, what can the Fed possibly do that would pump up the market? The Fed already stated that QE was becoming ineffective when they chose to terminate it in December 2014.
However, the bigger question is, do we, as a society, really want Central Banks to continue manipulating the investment markets in one direction (higher) using debt that is ultimately owed by taxpayers? If so, to what end? A continuation of the roller-coaster ride of bubbles and crashes they have engineered for the last 20 years?
ADDITIONAL DATA AND CHARTS SIGNALING REVERSION TO MEAN
The S&P 500 has been heading downward since the middle of 2015 with a series of lower highs. Small-capitalization indices, such as the Russell 2000, has already dropped 14% since its high last June. Over the prior few months, we have documented many technical indicators, valuations, sales declines, and other data suggesting that it is likely to continue a downward path. These data include:
• Continued deterioration of market breadth (advancing/declining issues, advancing/declining volume).
• M&A activity set record highs in 2015. M&A volume always peaks at the end of a bull market (the last two peaks of M&A activity were in 1999 and 2007).
• Number of stocks setting new highs has dropped to just 2% of the S&P 500.
In fact, in the S&P 500, the top 20 companies are up 29% for the year, while the other 480 stocks are down an average of -3%.
• Small-cap companies, that do well in economic expansions, continue to lead large-cap companies downward.
• The collapse of High Yield Bonds continues to lead stocks lower
as investors abandon the riskiest holdings first.
Both our Simple Monthly Timing System and the monthly Relative Strength Indicator (RSI) System was accurate in identifying the start of the last two significant market downturns as well as upturns. For RSI, divergences between the market and the RSI indicator preceded each downturn (shown by the opposing green diagonal lines in the top-window prices and red diagonal lines in the RSI bottom window in the chart below). The actual signal was confirmed when RSI dropped below 70 (or rose above 30 for bullish signals). The last drop below 70 last occurred in June 2015, as highlighted in yellow in the lower right of the chart below:
The Relative Strength Indicator (RSI) correctly signaled each upturn and downturn of the S&P 500 since 2000. Before each market downturn, there was a significant divergence with the RSI. The RSI has been signalling a strong divergence since mid-2015.
So not only has our in-depth analysis disproved the simplistic upward trend conclusion of the earlier S&P 500 chart showing 2009 to present, but we have also discovered that we are likely on the cusp of the development a new trend – one that is downward. We need to see this trend develop a little more fully before we jump in with both feet. However, we are watching the charts and data carefully for that signal. Our paid Subscribers will get that signal when it comes.
A BULLISH CORRELATION WITH 2011?
Many bullish investors are making the case that the current market pattern looks very similar to the 2011 pattern. After all, there was a double bottom in August/October 2011, and there was a double bottom in August/October 2015, right? If 2016 plays out as 2012 did, then we can surely expect higher stock prices from here, the bulls argue. Provided are the two charts that the bulls claim proves their point. You have to admit, on the surface they are pretty convincing that the market is in a similar situation:
The market recorded a double bottom in August/October 2011.
The market also recorded a double bottom in August/October 2015. So higher prices for 2016, right?
BIG DIFFERENCE THAT'S NOT BEING CONSIDERED: DECLINING EARNINGS
However, you must look below the surface, into the details; an area in which IntelligentValue excels.
There is one significant difference between 2011 and 2015 that the bulls are not taking into consideration. In 2011, publicly traded companies were still recording earnings gains each quarter. Earnings for the S&P 500 grew from $70/share to about $87/share. On the other hand, in 2015 earnings dropped each quarter of the YEAR.
The chart below clarifies the EARNINGS situation: On the left side of the bottom window (labeled "S&P 500 EARNINGS) in the chart below you can see the rising earnings following the 2011 correction. Then, as shown on the right side of the bottom window of the chart below, you'll see that earnings have been declining each quarter since the high of 106 reached in the 1st quarter of 2015.
Another big difference is that at the 2011 lows, the PRICE/EARNINGS ratio (center window in the chart below) of the S&P 500 was near the long-term average PE; around 14 to 17. However, in 2015, even though the market was flat-to-down all year, the P/E ratio is now topping out at the nose-bleed level of 22.95 (as a result of those declining earnings mentioned above). That's not the Shiller-10 PE or some other machination of long-term earnings. 23 is the actual, real-time PE ratio of S&P 500 stocks as reported by the WSJ! Other indices are at even higher levels. The Nasdaq 100 is at a PE of 23.25, and the Russell 2000 small-cap index holds a PE of 152.54!
THE MOST IMPORTANT CHART YOU MAY SEE FOR 2016
If you only consider one single chart to plan your investment strategy for 2016, this may be the one you should choose. It is going to be almost impossible for stock prices to continue higher when you consider the two bottom windows in this chart:
A CONTRARIAN TAKE ON CONVENTIONAL WISDOM
Near the beginning of this newsletter we mentioned that if you want to be successful with your investing starting in 2016, you will have to "break some nasty habits and learn to shun the 'conventional wisdom."
As an example of 'conventional wisdom,' here is a link to a Standard and Poors white paper titled, "What Rising Rates Will Not Do," the opening sentence of the paragraph at the bottom of the page will raise the temperature of every contrarian who reads it:
"Given the record low interest rates in the period following the financial crisis, the market consensus is clear: there is only one direction for rates to go, and only the timing and pace of that increase is up for debate."
• This is a great example of the pervasive conventional wisdom regarding the direction of interest rates in 2016!
Here's some unconventional wisdom for you: Based on our analysis, we do not believe there's anywhere near a possibility of rising rates in 2016 or anytime in the foreseeable future. With all the challenges facing the economy and the market mentioned above, we believe the pressure is going to be in the opposite direction: towards lower rates and a restart of QE.
However, having just raised rates to 0.25% from 0%, the Fed can only lower rates a single time – back to 0%. As companies continue to lose money, and the economy gathers momentum to the downside, we believe investors will realize there are no Central Bank saviors this time around, become frightened, and abandon the markets to avoid a 2008-like selloff. While a downturn has already begun, we may see a much more significant decline in the equity markets beginning soon.
Another great example of 'conventional wisdom:'
We recently reviewed the forecasts of earnings and forecasts of market (S&P 500) prices published by six of the largest brokerages and investment banks. Every one of them forecasts an increase in earnings and an increase of the market of about 6%, plus or minus just 0.5%. Not surprisingly, 6% is the approximate average of the market's returns over the last century. However, we know from Doug Short's chart (above) and our analysis of the S&P 500 that the market is likely to revert to trend this year. However, the big investment banks/brokers know there's not much business to be gained if you are selling long positions in individual stocks and the forecast is down!
Here's some more 'unconventional wisdom' for you: Based on our analysis, we think the probabilities for the market in 2016 favors the bears, not the 6% upward average that all the big banks and brokers are forecasting. If you want the facts and not the gloss, we have that for you. We know that money can be made not only to the upside with undervalued stocks, but with Tactical Sector Rotation, Inverse ETF selection, and Smart Asset Allocation based on the principles outlined above when the market is beginning to trend downward.
#7) Rule number seven for successful investing is to avoid the conventional wisdom and look deeper if you want to make every investment a winning money-maker.
OUR PLAN FOR THIS WEEK
For our Paid Subscribers: We will continue to hold the current positions in our Model Portfolios that are already profiting from our quantitative and econometric analysis. Paid subscribers can read specific instructions in the Portfolio's section of our Members Area.
Next weekend we will publish Part 2 of "How to Dramatically Improve Your Returns for 2016" and we'll show you how to select individual investments that will make money regardless of the direction of the market!
We will provide you with more proven rules for investing success and will show you the details of some positions that are likely to earn big profits from trends that are beginning right now. We'll get into the details of how to identify and trade specific equities that take advantage of those trends, first ensuring that the trends are durable and have not yet run their course. We hope to see you again next week for Part 2!
Best Wishes for Another Week of Intelligent Value Investing,
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Opinions expressed herein by the author are not an investment recommendation and are not meant to be relied upon in investment decisions. The author is not acting in an investment advisor capacity. This is not an investment research report. The author's opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that potential and existing investors conduct thorough investment research of their own, including detailed review of the companies' SEC filings, and consult a qualified investment advisor. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author's best judgment as of the date of publication, and are subject to change without notice. Shareholders, employees, and writers associated with IntelligentValue, Inc. may hold positions in the securities that are discussed. If you are not sure if value investing or a particular investment is right for you, we urge you to consult with a Certified Financial Advisor. Neither IntelligentValue.com, nor any of its employees or affiliates are responsible for losses you may incur.