Sven, thanks for the good content. What I like best is when you analyze specific stocks from a value investing perspective. If someone doesn't understand it, then they don't understand the risk - reward concept. I'm 37 years old, the crisis of 2008 cheered me up so much that after the blood bath I sold everything, paid the down payment for my apartment. I got back into the game only a few years ago, I've already paid off the loan, and now I only follow a value investing philosophy. None of them will accept it until they experience a serious recession and panic. Until then, we are all immortal and financial geniuses. Please continue these videos, 15-20 min., with specific examples, analysis, and value investing foundational statements, it is fun to meditate on them regularly. The US market is overvalued, it would be great if you could created more content on European exchanges. For example, a year ago you discussed Brembo NV, now the company is down 30%, it looks like a good option for value investing.
I've only been on my investment journey for 4 years but what I've seen in my travels is that you really have fewer "value investors" then investors think there are. Everyone is a value investor when the market is booming but when the market or companies in the market fall 50% some of those so called "value investors" become afraid. Its fascinating to hear the stories about other bubbles then now that we are in one to see investors act exactly the same. All you have to do is read a few books to know what's happening. Great video Sven! Keep up the good work.
Impressed by the patience and restraint Sven. For people out of their 30s some of us can remember comments about how Buffet is outdated and has lost his touch. This has been going on a long time. Funny we can't remember any of those people's names. I love your willingness to be that bearer of the message no one wants to hear. It makes your channel my favorite investing channel
"some of us can remember comments about how Buffet is outdated and has lost his touch" Based on what? Because Berkshire is so large that they have very limited investment options that they can utilize? Berkshire can't even bother with anything under a multi-tens of billion dollar investment and even the smallest investment that they could make that would matter would literally buy out hundreds of companies outright.
Hey Sven, thank you for your great videos. I am a Tesla shareholder (no a fanboy), I bought into the company back in 2019 so you can imagine I enjoyed a solid 10x. But, I didn't sell at the high and thus lost a good portion of the gains while I actually sold a portion at a 5x gain. I've started to move my money into more stable business with clearer compounding potential. I appreciate your videos as I am still trying learning how to choose these companies.
I’m 48, Sven, and I think we are similar in age - with you perhaps a few years younger than me. I remember all these crises that you speak of and remember the panic that set in among supremely confident young people. It’s not all ‘number go up’ all the time. The voices that criticize your patient perspective during bull markets fall silent or drop out of the game completely eventually. Keep doing what you’re doing. We appreciate it!
Sven, I am a subscriber to your videos from about a year and I have to say that this is one of the few comments that I am writing in RUclips. I think that very few people are ready to do their own research and are willing to have a different view on the US stock market and value investing. I believe you produce quality analysis in every video that I have listened. It is evident that you are great investing professional and I honestly believe that in our "trend world", contrarian investors like yourself will be able to find 10 baggers in the long term more easily, compared to the generic approaches (blindly following short term trends). Keep up with the good work!
Love what you do Sven. Not always agreeing with you but your channel and view is interesting and we need people like you to better understand all of this. Thanks 🙏
My favourite RUclipsr. Every time I feel like throwing in the towel to give up value investing I watch this channel for comfort. Apple has been flat for growth for a while and the market is somehow so patient with their lack of innovation. Then you have other companies like alibaba that just cannot get things right to have sustainable rally.
Great video Sven. Maybe what value investing is missing is a shift in investor sentiment: for most value companies, the numbers are there (growth of revenues, earnings, dividends, ...). Similar to what you said, I think some people don't research enough and tend to invest their money in companies they don't have to "get to know that well". And I think this is why we see companies like NVIDIA, Tesla, Apple making new 52 week highs every month. I don't think we can control investor sentiment, so we have to keep putting cash in sound businesses and wait. It usually pays-off, as I have seen with META: a pessimistic 2022 (the company will lose to Tik-tok and die) and an exuberant 2023 (the company is dirt-cheap). All it takes is research, conviction/patience and consistency.
Thank you sven. Always enjoy the content, including thr comment regarding the age of the viewers, guity as charged. Please comment (not necessarily a full video) on how you see Europe standalone, not just in comparison to the US.
It's been a while since you looked into Brazilian market. Huge, mostly stable country, no serious geopolitical issues, gets on with both US and China, young fast growing population similar to India, one of the largest and diversified commodities exporters. Stock market looks pretty cheap - not as cheap as China but nowhere as crazy as India. I'm a regular visitor in Brazil and what I see gives me confidence this is one of the future markets. By the way, I always recommend investors into EM to visit the countries you investing, try products, witness the reality on the ground - not just from newspapers. It gives you confidence in your investments. Ambev in particular looks pretty attractive to me: stable dividend currently at 6.8%, growing revenues and earnings, stable growth in free cash flow. Guarana is more popular than Coke there - huge moat as they own most of the popular brands in Brazil. 12 PE and the stock is down 70% from its all time highs as is most of Brazilian market. Many companies paying above 5-10% dividends. Also, would be interesting if you could talk in more detail about USD and EM correlation as expensive USD seem to be one of the biggest issue for EM stocks. Thank you. Love your videos!
@2:40 Part of why Berkshire has such a large nut is they have a sizing issue. You can't just look at what Berkshire is doing and gauge the market. The pool of stocks that they have to choose from is so small for them to even try to move the needle with.
The S and P 500 historical mean PE is 16.00. It's currently 27.43. The market is overvalued fueled by exuberance. The Wall St rug pull is coming. People should go more cash heavy and wait for the pull backs whilst simultaneously investing in only great businesses and not great meme stocks.
Question: Do you think the amount of money boomers and Gen X has poured into the market impacted price? I foresee I boom then a crash once all the boomers retire and flood the markets with money, however, after these companies expand they will have to contract to the market now that boomers who hold roughly half of the US wealth are no longer in the market (I.e., the crash). Is this plausible in your view are just simply just silly economics fan fiction?
Any reason to believe that the P/E of stocks must stay constant over time? Is it possible that $1 of earnings should actually cost more in 2024 than it did in 1950?
We will see....don't forget, that there are two variables in PE (Price & Earnings). It can be that the Earnings will grow fast and the S&P 500 will double by 2030. Of course this growth would be completely financially engineered, since it would not consider inflation. Inflated earnings is the instrument how the FED can betray the economic forces and created an earnings bubble. It is still possible, but the risk is alot bigger, then for normal productive growth e.g. in China.
Great video. Investors no longer take starting valuations into account. The expectation is that 30-40% returns will arrive irrespective of what the starting value is. Thanks Fiscal and Monetary policy for detaching asset valuations from fundamentals.
If history is any guide, you (and other value managers) will end up on the right side. Or we are living in a new paradigm where businesses are valued based on how much they can excite investors rather than how much they can earn. That paradigm poses some other very interesting societal challenges. Society and money are deeply interlinked and if you distort one, you distort the other. So this will be a fun ride.
US markets are so expensive, and I see some problems in the near future. I learned in my four years of investing that one should be buying when everybody is selling and selling when everybody is buying. So I sold or more frequently trimmed my positions this year, because there are many many overvalued stocks right now after this latest rally, and just took some profits on those stocks that were too expensive to risk being almost 100 % invested, especially in those. That's what that guy in the comments was asking I guess. So... Yes, risk-reward. Buy low, sell high (or not sell at all and that's it). Value investing. Thanks!
the long term chart of the S&P500 dividend yield is misleading, because nowadays increasingly more returns to shareholders happen in the form of buybacks. We would need to take a look at a chart of buybacks + dividends
Value investing is, for me finding great business at low prices. Investing in an index is therefore not. It can be very difficult looking at Qqq massive 3yr growth when the individual business aren’t short term performing like this… but long term is the goal!
Excellent video.Chuck carnevale said something like this that resonated with me.Valuation matters.You have to understand the price at which you purchase.
2:55 Sven, the sea of stocks when one is up and other is down lets the investors to pick a good company. Even you sometimes you say it is under valuated by stock market for some reason. Then sell in a year or sooner bc it got 40% or more up. Then pick another, and so on. This is also investment strategy. I clearly do not understand your strategy bc you are saying I buy and hold forever - no exit.
The discrepancy between the market and factors like „value investment“ and „s&p trends“ are discussed. Missed are real world variables such as the psychological impact of the emergence of the internet, demographics and wealth distribution dynamics.
Like Warren says if you read a few books like the intelligent investor, margin of safety, common stocks and common profits, and more, you either get it or you don’t. For those who don’t it’s best you invest in index’s. Value will always win over TIME over all classes it just sometimes goes out of fashion
Two examples of bad value in Oz. Westpac bank cutting dividend, stagnating 5 years. Telstra. Unreliable. Surely a mix of growth and value can’t be bad.
@Sven even tho all the points you mentioned are basically right, there is one thing which makes emerging markets a gamble and not an investment. It is the right of legitimate ownership as a shareholder. Buying chinese stocks as a foreigner is more like buying contracts which the chinese government officially does not even recognise as according to laws. If China should ever attack Taiwan or just wants to f*** with the western world it will terminate those nearly worthless contracts for good. I still liked the video :).
This is exactly what makes me bullish on China right now. They are in a major crisis and because the government is on the hook for most of the real estate fiasco their hands will be tied to prioritize the economy and keep their natural imperialism in check. They won’t want to rock the geopolitical boat too much until they can lock it down. As Charlie Munger once said, ‘follow the incentives’. The incentives just aren’t there to attack Taiwan right now. Maybe in 5-10 years, but not now. Besides, how can they galvanize their poverty-stricken citizens on mainland China to support their unnecessary war even as they cut off the Western hand that feeds them? It wouldn’t be wise on the domestic front, either. They can’t really pull off another Tiannamen Square and they know it.
Hi Sven, what do you think about investing in RSP, the S&P 500 equal weghted etf? It has outperformed the market cap weighted S&P 500 over the last 20 years and even 50 years (backtested). I think because of small size and value factor. Its kind of anti- bubble, because it rebalances each quarter and takes speculative return of the table. What is your meaning?
My value portfolio with a 5.5% yield has been flat for over 3 years. I own more shares with drip. I just keep telling myself it will work out. Time will tell but it definitely bothers me. My smaller value/growth portfolio is up 50% in same time frame. I have noticed when the mega caps drop my value portfolio goes up. So it gives me some piece of mind that if the bubble pops my portfolio might do well. At least my real estate is up 40-50% over the last 3 years. Gold and silver has done well also.
Great video. Buffet always has cash, in 2006 he had 46 billion or so but the lowest he went from what I can find is around 24 billion in 2007-2008 so not even 1/2 was deployed, in 2020 he went from 146 billion before COVID to 106 billion so not even 1/3 was deployed. He always adds more cash over time as well, maybe some balance with his investments, or as he thinks risks rise over time since the last economic cycle or maybe due to risk of taxation, he specifically talked about risk of rising US taxes in the future in the last talk he had. I think overall it is a mistake to think that Buffets 200 billion cash right now is a bet not-on the USA as he has 800 billion invested in the USA so if anything it is a hedge or a war chest combination of some sort.
Not sure what people mean by "missing out" on a rally. Missing out on a lower dividend? Higher buyback price? Do you really think you will have the "stomach" to sell near the end of the rally when you couldn't stop yourself from buying the "start"
Just to stay on your last topic about Tesla, it is an automotive company. Beautiful company, nice vision, nice technology, nice "kletskoek", but can it produce cars as Toyota, Volkswagen or Stellantis does. Yes I see a lot more Tesla in my carmirror and on the road, but my vision is not that narrow... I want to see Tesla fall as Volkswagen fell many times and maby many times harder to prove themselves they are better. But its the cyclical nature of the market and for the automotive industry and we shall see if they can swim harder. 9:46 tx Sven!
Explanation please: wouldn’t it be easier to just buy Berkshire shares? What advantage is there to follow “Value investing with Seven” advice versus Berkshire? Just an honest question Sven. Thanks!
“If something is too hard, we move on to something else. What could be simpler than that?” -Charlie Munger I'll stick to lower valuations and let others ride the Nvidias
I do agree with the principles of value investing. What I do not agree with is how you assess value. You simply look at the P/E and if it is 'low' you buy then sell when the P/E is high. That is NOT value investing. That is trading. Even deep value investor Ben Graham was willing to buy high P/E and hold for long-term if the fundamentals remain strong (Geico). But during his time, buy and hold businesses were rare and it was not unusual for businesses to get disrupted and go bankrupt. As Professor Aswath Damodaran says, P/E only shows relative price but durable cashflows determine value.
Another great video, thank you! I wish something like this existed 20 years ago. But better late than never. Great point about standard deviations! However the crowd behaves like in 1700s in Holland. Tulips were expensive back than 😅
a lot of the Emerging market indexes have gone up 5 to 7x during the same time period just not in dollar adjusted terms. the Jakarta index is up 7x bovespa and NSE 5x in local currency in the past 15 years
I’ve been recently buying Tesla, I think the robotaxi will come to fruition, even if it’s 2 years away, and if it doesn’t, with the FSD & Cybertruck definitely making an appearance in the balance sheet next year, I can only say: “I LIKE THE STOCK”
market is going up skyhigh and gold is dropping like flies, like Jaguar Mining. PE ratio of 6, down 13%. Based on your gold video, load up on gold? :) Looking forward for your gold miner analysis video so we can avoid miner traps and hedge our portfolio safely and profitably :)
Seems to me that staying faitful to a school of investing is the hard part for the majority of average investors. Value investing works, trading works, daytrading also works for some people. How well we understand and act within a frame is the key. If you are good at "hit and run" why not, and if you are good at value investing the same.
Hello Sven. The only thing that i dont really like with the emerging markets is that getting information that you can 100% trust isn't that easy. US as you mentioned are easier on the news and you can calculate easier risks, i personally find China market very interesting , so if you can make any videos about interesting companies there would be very much appreciated.
I would add one more point which is net worth at risk. Many people commenting on missing NVIDIA or micro or the next hot stock may have participated but with only a fraction of their net worth. It's very easy to buy a few shares (1-2%) in a 100k portfolio but it is very different to deploy 10%+ towards an idea. That is conviction. I am sure there will be some people posting here that did so but those will be in the minority. Can you invest 80%+ of your liquid net worth and sleep well at night?
I've invested half of net worth and feel still a bit uneasy, even though 25% invested is in medium term bond funds and the rest in equity etfs with some geographical distribution. I think most investing world talking heads are completely detached from normal life when their usual advice is to invest close to 100% of your wealth. Yeah, 50% down doesn't really hurt a multimillionaire, and much easier to keep calm head vs gambling with retirement savings. Even value investments can go down a lot when times get really tough... the only real hedge is money, I believe. Probably gold as well.
Maybe focusing on free cash flow and dividend yields misses the bigger picture that companies at the top of the markets (Mag7) may simply create more value for their shareholders reinvesting into their own operations through opex and capex than by focusing on cash generation and distribution. Maybe they are the new value stocks in a way, being able to compound in new ways (through internal value accretion rather than through capital distribution), and building on their moat to disrupt older business models / sectors? Even Berkshire went from picking buts to investing in great businesses at a fair price!
Right? I buy when I see value AND growth opportunity. Buy NVDA when it's $10/share. Not today. Buy META when it's $90. Not today. Buy them today, and the risk is huge.
The US market is trending at a high PE. This only means that investing in an SPY will probably be effected by a market crash due to its high PE. Still, it is the average PE and one can find some US companies which will still do good even after a crash - but you must wait for a 50% downfall and you must have the stomach not to sell. You should have the courage to buy when the value of the stock market is low. Cash is not king when you have 0-3m treasury funds with a 5.5% return (SGOV). I sold half of my stocks a year ago and purchased treasury bills. The other half are still in stocks with 50% US, 40% China and 10% elsewhere. Investing in the US only is risky as well.
Hi Sven. Many people in the comments can’t see the risks, if they are investing less then 7-8y and it is not their retirement money they will need in the next 10-15y. Seen like this many start and do mistakes and have luck plus have in the last 10-15y (since bigger and longer crisis 2008-2009) rising stock markets in the US. The money most of the people accumulated till now is practically a high risk investment, that is in such a rising phase nearly safe. So for them Your safe handling is not logical, but I guess the money You invest is Your working capital, that has in future the function as retirement money. Theoretically a major cycle should end soon and give us soon stagnation and falling share prices. But times are mad and it’s wise to bet safe ;) Why rely on luck when it can be done clever…
My question can seem stupid but let me put it. When you say "6% yield and 6% growth", does it mean 6% earning's yield or are you referring to dividend yield?
Flow Traders is down about as much as Tesla, Alibaba too ... . Looking forward to when it explodes and beats Tesla. Please, discuss also the fundamentals with the stocks, i.e. how much they invest into research and development and what are they developing to stay relevant in the market. After the sudden sell of Phosagro, please discuss also when would you immediately sell the chinese stocks.
Is it enaugh to calculate the PE*PBV ratio which has to be >22, should I also calculate the margin of safety/discount? How to even calculate the value of a stock to calculate the margin of safety? What to exactly analyze and study before buying a stock? I bough 3 shares of Intel because it has an alright PE and PBV ratio, it's been around for a while, recently they changed their business plan for more growth and they stock price chart is about the lowest it has been this year. What else should I factor into this analysis? Should I go all in with intel?
The reason value investing can fail is that it is rarely a scalable and non-cyclical investment. In addition, entry barriers are low without a monopoly.
Have you looked at EPAM, Sven? Couldn't find any video from you about it. It's an IT company trading near 2020 covid levels. Since the stock tanked they started to repurchase shares. Maybe a good example for how to do it, compared to Apple. 🙂
If you are searching return, Deep Value is a total mess. Low IRR and low MoM for long term periods. Other thing is seeking value approach in high liquidity stocks.
There’s no one right way to invest, otherwise all of us would be successful. I think different markets warrant different approaches. In a bull market, value is okay but momentum stocks will be better. Or you can put all your money in the bank, never good!
I'm one of these Tesla fanboys in the comment. I came to here a different opinion (the value investing mindset) back then. And I still come here for the same reason. The most boring thing on RUclips would be looking for confirmation. People need to chill a bit. A value investor prays for mean reversion, while a growth investor bets against it. Both need risk management, or will fail. It's not the genius system making you a profit, it's sticking to it.
Sven, I think it's impossible to time the market, and that there are always some good company / ETF at a reasonable price (even in a 03/2000 environment). I prefer to pay the price and stay in the market in a turbulent bubble burst, -obviously- invested in good companies at reasonable valuations. I could not handle the FOMO (outside the market) in some 'long and grey situations'.
Could you do a video on the valuation of the McDonalds stock? It recently traded close to its 52 weeks low and it is one of the greatest brands, I'm curious to know it fits into the category of "buy great companies at fair prices".
Hi Sven! Thank you for your regular videos. Could you make a video about Rights Offerings, how to calculate a fair price after the company makes rights offering, whether to use those rights or sell them, etc. On of the companies I am following - Sify Technologies is offering rights right now, and I find little information on how to do math based on the rights offering information I have. Thank you in advance!
I'm 100% value investor. I can't buy, literally, stocks or indexes with high multiples. I'ts like going to a store and buy discounted stuff and bargains instead of over expensive things.
I like the potential growth factor of the Indian market as a whole and their GDP and economy. With that being stated, the small cap etf for India "SMIN" has an expense ratio of like 0.79% which is INSANE. I wish I had a better fund to invest into the nifty 250 microcap over the long haul, but I suppose it is what it is lol.
80% of the market is owned by institutions. The institutions decide what stocks will be over or under valued. Most likely the reason politicians have the best returns.
thanks Sven excellent review about value and current state of the market. Completely agree with compounding as we have been very fortunate to have been with Google since 2007. This is not the time to chase technology as most of these AI companies on the venture side will fail in the first year. Nvda cant keep the market and AI story chasing up forever.
Inflation informs rates. Rates decide the multiple for stocks. Our productive capacities are extreme now so inflation can be controlled fairly easily with just more output. Meanwhile most new services and goods produced by massive automation don’t even factor in inflation figures (think Google, RUclips, etc). It’s a different world now.
Aperam was one of the stocks you evaluated during your Amsterdam stock exchange analysis. You said you will take a closer look under a price of 30, it is 26 now. What is your opinion on the current price? Also the steel price changed quite a bit since your last analysis. Might be a cyclical opportunity.
I am no tesla fanboy. I am alibaba stock holder. Alibaba heartbreakingly doing nothing but drop. It hurts but you give me the spirit to keep looking at fundamental cashflows and buybacks and dividends. Thank you i appreciate your work, it really helps me while the whole market is laughing about my decision
@@TheRustyLM Their cashflow is also dropping and revenue is stagnant. PDD (aka Temu) is eating their lunch. But no, it is the Tesla fanboys and the shorters...
"When growth goes wrong it looks ugly". 100% agree. Thanks for your perspective as always!
Sven, thanks for the good content. What I like best is when you analyze specific stocks from a value investing perspective. If someone doesn't understand it, then they don't understand the risk - reward concept. I'm 37 years old, the crisis of 2008 cheered me up so much that after the blood bath I sold everything, paid the down payment for my apartment. I got back into the game only a few years ago, I've already paid off the loan, and now I only follow a value investing philosophy. None of them will accept it until they experience a serious recession and panic. Until then, we are all immortal and financial geniuses. Please continue these videos, 15-20 min., with specific examples, analysis, and value investing foundational statements, it is fun to meditate on them regularly. The US market is overvalued, it would be great if you could created more content on European exchanges. For example, a year ago you discussed Brembo NV, now the company is down 30%, it looks like a good option for value investing.
I've only been on my investment journey for 4 years but what I've seen in my travels is that you really have fewer "value investors" then investors think there are. Everyone is a value investor when the market is booming but when the market or companies in the market fall 50% some of those so called "value investors" become afraid. Its fascinating to hear the stories about other bubbles then now that we are in one to see investors act exactly the same. All you have to do is read a few books to know what's happening. Great video Sven! Keep up the good work.
"drinking beer and chasing...." enjoy your stuff. Thank you Sven.
this time, Sven was really funny - "I don't have Tesla fanboys in the comments"
Impressed by the patience and restraint Sven. For people out of their 30s some of us can remember comments about how Buffet is outdated and has lost his touch. This has been going on a long time. Funny we can't remember any of those people's names. I love your willingness to be that bearer of the message no one wants to hear. It makes your channel my favorite investing channel
"some of us can remember comments about how Buffet is outdated and has lost his touch"
Based on what?
Because Berkshire is so large that they have very limited investment options that they can utilize?
Berkshire can't even bother with anything under a multi-tens of billion dollar investment and even the smallest investment that they could make that would matter would literally buy out hundreds of companies outright.
@@mjs28s I didn't make the comments, so not sure what point you are responding to
Best Channel on RUclips
your on crack. this guy is the worst. lol. Some of my value stocks have tripled in the last 3 months. EDR as an example.
Hey Sven, thank you for your great videos. I am a Tesla shareholder (no a fanboy), I bought into the company back in 2019 so you can imagine I enjoyed a solid 10x. But, I didn't sell at the high and thus lost a good portion of the gains while I actually sold a portion at a 5x gain. I've started to move my money into more stable business with clearer compounding potential. I appreciate your videos as I am still trying learning how to choose these companies.
I’m 48, Sven, and I think we are similar in age - with you perhaps a few years younger than me. I remember all these crises that you speak of and remember the panic that set in among supremely confident young people. It’s not all ‘number go up’ all the time. The voices that criticize your patient perspective during bull markets fall silent or drop out of the game completely eventually. Keep doing what you’re doing. We appreciate it!
"In the short run, the market is a voting machine, but in the long run, it is a weighing machine." Benjamin Graham.
Thanks a lot for your insights. Love the channel. Greetings from Bogotá.
Sven, I am a subscriber to your videos from about a year and I have to say that this is one of the few comments that I am writing in RUclips.
I think that very few people are ready to do their own research and are willing to have a different view on the US stock market and value investing. I believe you produce quality analysis in every video that I have listened. It is evident that you are great investing professional and I honestly believe that in our "trend world", contrarian investors like yourself will be able to find 10 baggers in the long term more easily, compared to the generic approaches (blindly following short term trends).
Keep up with the good work!
thanks, happy to hear that!
Love what you do Sven. Not always agreeing with you but your channel and view is interesting and we need people like you to better understand all of this. Thanks 🙏
My favourite RUclipsr. Every time I feel like throwing in the towel to give up value investing I watch this channel for comfort. Apple has been flat for growth for a while and the market is somehow so patient with their lack of innovation. Then you have other companies like alibaba that just cannot get things right to have sustainable rally.
👍
Thanks for keeping me grounded Sven. have a good one !
Great episode! I heart Sven’s sarcasm. Surprisingly fluent👍
And great shirt. European styles over USA, for sure.
Thanks, this was a good topic and good debate. Really enjoyed this.
thanks!
You are right 👍 Nice sweater.
Great video Sven. Maybe what value investing is missing is a shift in investor sentiment: for most value companies, the numbers are there (growth of revenues, earnings, dividends, ...). Similar to what you said, I think some people don't research enough and tend to invest their money in companies they don't have to "get to know that well". And I think this is why we see companies like NVIDIA, Tesla, Apple making new 52 week highs every month. I don't think we can control investor sentiment, so we have to keep putting cash in sound businesses and wait. It usually pays-off, as I have seen with META: a pessimistic 2022 (the company will lose to Tik-tok and die) and an exuberant 2023 (the company is dirt-cheap). All it takes is research, conviction/patience and consistency.
Thank you sven.
Always enjoy the content, including thr comment regarding the age of the viewers, guity as charged.
Please comment (not necessarily a full video) on how you see Europe standalone, not just in comparison to the US.
It's been a while since you looked into Brazilian market. Huge, mostly stable country, no serious geopolitical issues, gets on with both US and China, young fast growing population similar to India, one of the largest and diversified commodities exporters. Stock market looks pretty cheap - not as cheap as China but nowhere as crazy as India. I'm a regular visitor in Brazil and what I see gives me confidence this is one of the future markets. By the way, I always recommend investors into EM to visit the countries you investing, try products, witness the reality on the ground - not just from newspapers. It gives you confidence in your investments.
Ambev in particular looks pretty attractive to me: stable dividend currently at 6.8%, growing revenues and earnings, stable growth in free cash flow. Guarana is more popular than Coke there - huge moat as they own most of the popular brands in Brazil. 12 PE and the stock is down 70% from its all time highs as is most of Brazilian market. Many companies paying above 5-10% dividends.
Also, would be interesting if you could talk in more detail about USD and EM correlation as expensive USD seem to be one of the biggest issue for EM stocks.
Thank you. Love your videos!
the government is a problem in brazil, they are a commodity heavy country. there is some there there, but it's not a gimmie.
Everyone has an opinion, just a few have the knowledge. Dont listen to them Sven. You are doing it great.
@2:40
Part of why Berkshire has such a large nut is they have a sizing issue. You can't just look at what Berkshire is doing and gauge the market. The pool of stocks that they have to choose from is so small for them to even try to move the needle with.
The S and P 500 historical mean PE is 16.00. It's currently 27.43. The market is overvalued fueled by exuberance. The Wall St rug pull is coming. People should go more cash heavy and wait for the pull backs whilst simultaneously investing in only great businesses and not great meme stocks.
Question: Do you think the amount of money boomers and Gen X has poured into the market impacted price? I foresee I boom then a crash once all the boomers retire and flood the markets with money, however, after these companies expand they will have to contract to the market now that boomers who hold roughly half of the US wealth are no longer in the market (I.e., the crash). Is this plausible in your view are just simply just silly economics fan fiction?
Any reason to believe that the P/E of stocks must stay constant over time? Is it possible that $1 of earnings should actually cost more in 2024 than it did in 1950?
We will see....don't forget, that there are two variables in PE (Price & Earnings). It can be that the Earnings will grow fast and the S&P 500 will double by 2030. Of course this growth would be completely financially engineered, since it would not consider inflation. Inflated earnings is the instrument how the FED can betray the economic forces and created an earnings bubble. It is still possible, but the risk is alot bigger, then for normal productive growth e.g. in China.
Buddy earnings are growing 6% in nominal terms. 2% real, 2% -3% inflation, and 1.5% buybacks. Margins are already above long term average.
Investing in great busineses, if you can get it for a fair price, for value!
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Great video. Investors no longer take starting valuations into account. The expectation is that 30-40% returns will arrive irrespective of what the starting value is. Thanks Fiscal and Monetary policy for detaching asset valuations from fundamentals.
If history is any guide, you (and other value managers) will end up on the right side.
Or we are living in a new paradigm where businesses are valued based on how much they can excite investors rather than how much they can earn. That paradigm poses some other very interesting societal challenges. Society and money are deeply interlinked and if you distort one, you distort the other.
So this will be a fun ride.
US markets are so expensive, and I see some problems in the near future. I learned in my four years of investing that one should be buying when everybody is selling and selling when everybody is buying. So I sold or more frequently trimmed my positions this year, because there are many many overvalued stocks right now after this latest rally, and just took some profits on those stocks that were too expensive to risk being almost 100 % invested, especially in those. That's what that guy in the comments was asking I guess. So... Yes, risk-reward. Buy low, sell high (or not sell at all and that's it). Value investing. Thanks!
Agree with Sven. Past 5years SP500 up 91%, Romanian BET up 97%. Still you can buy biggest marketcap stocks on BET under 10 PE.
the long term chart of the S&P500 dividend yield is misleading, because nowadays increasingly more returns to shareholders happen in the form of buybacks. We would need to take a look at a chart of buybacks + dividends
Part of the problem is what was illegal 25 or 30 years ago is now standard practice in the industry
thanks for sharing
Value investing is, for me finding great business at low prices. Investing in an index is therefore not. It can be very difficult looking at Qqq massive 3yr growth when the individual business aren’t short term performing like this… but long term is the goal!
Excellent video.Chuck carnevale said something like this that resonated with me.Valuation matters.You have to understand the price at which you purchase.
Thanks Sven, you helping a lot of people to better life!
2:55 Sven, the sea of stocks when one is up and other is down lets the investors to pick a good company. Even you sometimes you say it is under valuated by stock market for some reason. Then sell in a year or sooner bc it got 40% or more up. Then pick another, and so on. This is also investment strategy.
I clearly do not understand your strategy bc you are saying I buy and hold forever - no exit.
Always excellent content! Thank you so much!
The discrepancy between the market and factors like „value investment“ and „s&p trends“ are discussed. Missed are real world variables such as the psychological impact of the emergence of the internet, demographics and wealth distribution dynamics.
Thanks for sharing
I got in Primetime token as well! Huge play, looking forward to the rest on this bull run!
Like Warren says if you read a few books like the intelligent investor, margin of safety, common stocks and common profits, and more, you either get it or you don’t. For those who don’t it’s best you invest in index’s.
Value will always win over TIME over all classes it just sometimes goes out of fashion
Two examples of bad value in Oz. Westpac bank cutting dividend, stagnating 5 years. Telstra. Unreliable. Surely a mix of growth and value can’t be bad.
@Sven even tho all the points you mentioned are basically right, there is one thing which makes emerging markets a gamble and not an investment. It is the right of legitimate ownership as a shareholder. Buying chinese stocks as a foreigner is more like buying contracts which the chinese government officially does not even recognise as according to laws. If China should ever attack Taiwan or just wants to f*** with the western world it will terminate those nearly worthless contracts for good. I still liked the video :).
This is exactly what makes me bullish on China right now. They are in a major crisis and because the government is on the hook for most of the real estate fiasco their hands will be tied to prioritize the economy and keep their natural imperialism in check. They won’t want to rock the geopolitical boat too much until they can lock it down. As Charlie Munger once said, ‘follow the incentives’. The incentives just aren’t there to attack Taiwan right now. Maybe in 5-10 years, but not now. Besides, how can they galvanize their poverty-stricken citizens on mainland China to support their unnecessary war even as they cut off the Western hand that feeds them? It wouldn’t be wise on the domestic front, either. They can’t really pull off another Tiannamen Square and they know it.
Hi Sven, what do you think about investing in RSP, the S&P 500 equal weghted etf? It has outperformed the market cap weighted S&P 500 over the last 20 years and even 50 years (backtested). I think because of small size and value factor. Its kind of anti- bubble, because it rebalances each quarter and takes speculative return of the table. What is your meaning?
My value portfolio with a 5.5% yield has been flat for over 3 years. I own more shares with drip. I just keep telling myself it will work out. Time will tell but it definitely bothers me. My smaller value/growth portfolio is up 50% in same time frame. I have noticed when the mega caps drop my value portfolio goes up. So it gives me some piece of mind that if the bubble pops my portfolio might do well. At least my real estate is up 40-50% over the last 3 years. Gold and silver has done well also.
Great video. Buffet always has cash, in 2006 he had 46 billion or so but the lowest he went from what I can find is around 24 billion in 2007-2008 so not even 1/2 was deployed, in 2020 he went from 146 billion before COVID to 106 billion so not even 1/3 was deployed. He always adds more cash over time as well, maybe some balance with his investments, or as he thinks risks rise over time since the last economic cycle or maybe due to risk of taxation, he specifically talked about risk of rising US taxes in the future in the last talk he had. I think overall it is a mistake to think that Buffets 200 billion cash right now is a bet not-on the USA as he has 800 billion invested in the USA so if anything it is a hedge or a war chest combination of some sort.
"Now I don't have Tesla fan boys in the comments." Classic!
Not sure what people mean by "missing out" on a rally. Missing out on a lower dividend? Higher buyback price? Do you really think you will have the "stomach" to sell near the end of the rally when you couldn't stop yourself from buying the "start"
Just to stay on your last topic about Tesla, it is an automotive company. Beautiful company, nice vision, nice technology, nice "kletskoek", but can it produce cars as Toyota, Volkswagen or Stellantis does. Yes I see a lot more Tesla in my carmirror and on the road, but my vision is not that narrow... I want to see Tesla fall as Volkswagen fell many times and maby many times harder to prove themselves they are better. But its the cyclical nature of the market and for the automotive industry and we shall see if they can swim harder.
9:46 tx Sven!
Thank you for discussing my comment 🎉❤😊
Value investing is the best strategy. Thanks Sven.
Price is what you pay. Value is what you get.
:-)
I am surprised you haven’t done a video on BMY. I will continue continue to patient like a good value investor lol.
Explanation please: wouldn’t it be easier to just buy Berkshire shares? What advantage is there to follow “Value investing with Seven” advice versus Berkshire? Just an honest question Sven. Thanks!
That is a great question - it is just the price paid for what you get!
“If something is too hard, we move on to something else. What could be simpler than that?” -Charlie Munger
I'll stick to lower valuations and let others ride the Nvidias
👍
I do agree with the principles of value investing. What I do not agree with is how you assess value. You simply look at the P/E and if it is 'low' you buy then sell when the P/E is high. That is NOT value investing. That is trading. Even deep value investor Ben Graham was willing to buy high P/E and hold for long-term if the fundamentals remain strong (Geico). But during his time, buy and hold businesses were rare and it was not unusual for businesses to get disrupted and go bankrupt. As Professor Aswath Damodaran says, P/E only shows relative price but durable cashflows determine value.
for the SP 500 it is ok to use the PE, earnings don't move as much
Another great video, thank you!
I wish something like this existed 20 years ago. But better late than never.
Great point about standard deviations! However the crowd behaves like in 1700s in Holland. Tulips were expensive back than 😅
a lot of the Emerging market indexes have gone up 5 to 7x during the same time period just not in dollar adjusted terms. the Jakarta index is up 7x bovespa and NSE 5x in local currency in the past 15 years
thanks for sharing!
I’ve been recently buying Tesla, I think the robotaxi will come to fruition, even if it’s 2 years away, and if it doesn’t, with the FSD & Cybertruck definitely making an appearance in the balance sheet next year, I can only say: “I LIKE THE STOCK”
thanks for sharing!
Hi Sven. What is your opinion on Nutrien at the moment seeing as it dropped alot in recent months? New video on Nutrien please : )
have to check where we are in the cycle
Value Investing has always been right over the LONGTERM. The question is not if. The question is how long will it take.
that is correct!
market is going up skyhigh and gold is dropping like flies, like Jaguar Mining.
PE ratio of 6, down 13%. Based on your gold video, load up on gold? :)
Looking forward for your gold miner analysis video so we can avoid miner traps and hedge our portfolio safely and profitably :)
Seems to me that staying faitful to a school of investing is the hard part for the majority of average investors. Value investing works, trading works, daytrading also works for some people. How well we understand and act within a frame is the key. If you are good at "hit and run" why not, and if you are good at value investing the same.
The market is always right. So is everyone who made a good investment.
great Video again Sven thanks
Hello Sven. The only thing that i dont really like with the emerging markets is that getting information that you can 100% trust isn't that easy. US as you mentioned are easier on the news and you can calculate easier risks, i personally find China market very interesting , so if you can make any videos about interesting companies there would be very much appreciated.
thanks for suggesting!
I would add one more point which is net worth at risk. Many people commenting on missing NVIDIA or micro or the next hot stock may have participated but with only a fraction of their net worth. It's very easy to buy a few shares (1-2%) in a 100k portfolio but it is very different to deploy 10%+ towards an idea. That is conviction. I am sure there will be some people posting here that did so but those will be in the minority. Can you invest 80%+ of your liquid net worth and sleep well at night?
I've invested half of net worth and feel still a bit uneasy, even though 25% invested is in medium term bond funds and the rest in equity etfs with some geographical distribution.
I think most investing world talking heads are completely detached from normal life when their usual advice is to invest close to 100% of your wealth. Yeah, 50% down doesn't really hurt a multimillionaire, and much easier to keep calm head vs gambling with retirement savings.
Even value investments can go down a lot when times get really tough... the only real hedge is money, I believe. Probably gold as well.
Maybe focusing on free cash flow and dividend yields misses the bigger picture that companies at the top of the markets (Mag7) may simply create more value for their shareholders reinvesting into their own operations through opex and capex than by focusing on cash generation and distribution. Maybe they are the new value stocks in a way, being able to compound in new ways (through internal value accretion rather than through capital distribution), and building on their moat to disrupt older business models / sectors? Even Berkshire went from picking buts to investing in great businesses at a fair price!
Amazing content, thank you.
Love the sweater! Great video as always.
Sweater Sven!
Value versus growth is a false dichotomy. We are all looking for growth we just differ on the price we are willing to pay.
Not quite, many of these value investors buy companies that are not growing at all or even shrinking because they are “cheap”
Right? I buy when I see value AND growth opportunity. Buy NVDA when it's $10/share. Not today. Buy META when it's $90. Not today. Buy them today, and the risk is huge.
@@eco-enjoyer ironically NVDA is probably cheaper now than it was when the share price was $10
The US market is trending at a high PE. This only means that investing in an SPY will probably be effected by a market crash due to its high PE. Still, it is the average PE and one can find some US companies which will still do good even after a crash - but you must wait for a 50% downfall and you must have the stomach not to sell. You should have the courage to buy when the value of the stock market is low.
Cash is not king when you have 0-3m treasury funds with a 5.5% return (SGOV). I sold half of my stocks a year ago and purchased treasury bills. The other half are still in stocks with 50% US, 40% China and 10% elsewhere. Investing in the US only is risky as well.
Hi Sven. Many people in the comments can’t see the risks, if they are investing less then 7-8y and it is not their retirement money they will need in the next 10-15y. Seen like this many start and do mistakes and have luck plus have in the last 10-15y (since bigger and longer crisis 2008-2009) rising stock markets in the US. The money most of the people accumulated till now is practically a high risk investment, that is in such a rising phase nearly safe. So for them Your safe handling is not logical, but I guess the money You invest is Your working capital, that has in future the function as retirement money. Theoretically a major cycle should end soon and give us soon stagnation and falling share prices. But times are mad and it’s wise to bet safe ;) Why rely on luck when it can be done clever…
Thanks for the update. I bet those Primetime token holders aren't too worried about the markets.
My question can seem stupid but let me put it. When you say "6% yield and 6% growth", does it mean 6% earning's yield or are you referring to dividend yield?
Flow Traders is down about as much as Tesla, Alibaba too ... . Looking forward to when it explodes and beats Tesla. Please, discuss also the fundamentals with the stocks, i.e. how much they invest into research and development and what are they developing to stay relevant in the market. After the sudden sell of Phosagro, please discuss also when would you immediately sell the chinese stocks.
Is it enaugh to calculate the PE*PBV ratio which has to be >22, should I also calculate the margin of safety/discount? How to even calculate the value of a stock to calculate the margin of safety?
What to exactly analyze and study before buying a stock?
I bough 3 shares of Intel because it has an alright PE and PBV ratio, it's been around for a while, recently they changed their business plan for more growth and they stock price chart is about the lowest it has been this year.
What else should I factor into this analysis?
Should I go all in with intel?
The reason value investing can fail is that it is rarely a scalable and non-cyclical investment. In addition, entry barriers are low without a monopoly.
Have you looked at EPAM, Sven? Couldn't find any video from you about it. It's an IT company trading near 2020 covid levels. Since the stock tanked they started to repurchase shares. Maybe a good example for how to do it, compared to Apple. 🙂
If you are searching return, Deep Value is a total mess. Low IRR and low MoM for long term periods.
Other thing is seeking value approach in high liquidity stocks.
If you invest in value, but in single stock you kill compounding also if single company goes bust (bankrupt)...
if it goes bankrupt, it is not value investing
There’s no one right way to invest, otherwise all of us would be successful. I think different markets warrant different approaches. In a bull market, value is okay but momentum stocks will be better. Or you can put all your money in the bank, never good!
thanks for commenting!
How does Argentina look as an emerging market? I love what Milei is doing there but I worry that he'll get stopped along the way
Great video Sven thanks. I think it is a good time to discuss Chinese stocks like BABA, JD because they become value stocks
I'm one of these Tesla fanboys in the comment. I came to here a different opinion (the value investing mindset) back then. And I still come here for the same reason. The most boring thing on RUclips would be looking for confirmation.
People need to chill a bit. A value investor prays for mean reversion, while a growth investor bets against it. Both need risk management, or will fail. It's not the genius system making you a profit, it's sticking to it.
Thanks Christoph for stopping buy, appreciate your inputs!
How about starting a position in a good overvalued company like Microsoft and DCA my way into it? And of course, if it dips, I'll buy more
Great Video Sven. Wondering if you could do a review on General Mills. Thanks!
thanks for suggesting!
Sven now criticizes Cathy, but he even bought Baidu just because she bought it. I used to be in his platform.
not correct!
Sven, I think it's impossible to time the market, and that there are always some good company / ETF at a reasonable price (even in a 03/2000 environment). I prefer to pay the price and stay in the market in a turbulent bubble burst, -obviously- invested in good companies at reasonable valuations. I could not handle the FOMO (outside the market) in some 'long and grey situations'.
Could you do a video on the valuation of the McDonalds stock? It recently traded close to its 52 weeks low and it is one of the greatest brands, I'm curious to know it fits into the category of "buy great companies at fair prices".
yes, 52 week lows, but still at a high PE ratio
it's really a sad situation when owning otc stocks is better option than trying to deal with the general market
depends on what you own!
Can berkshire really use all that cash should the opportunities arise or is it needed for the insurances businesses?
just $20 to $30 billion is for insurance needs
Hi Sven! Thank you for your regular videos.
Could you make a video about Rights Offerings, how to calculate a fair price after the company makes rights offering, whether to use those rights or sell them, etc.
On of the companies I am following - Sify Technologies is offering rights right now, and I find little information on how to do math based on the rights offering information I have.
Thank you in advance!
I'm 100% value investor. I can't buy, literally, stocks or indexes with high multiples. I'ts like going to a store and buy discounted stuff and bargains instead of over expensive things.
Sven, can you please recommend 2 books for learning how to value invest?
here you have it summarized ruclips.net/video/TqCZDayTUi4/видео.html
how is this emerging market etf called (that is mentioned in the video)?
just the ishares one I think
eem,vwo,sche there are a few of them i think
I like the potential growth factor of the Indian market as a whole and their GDP and economy. With that being stated, the small cap etf for India "SMIN" has an expense ratio of like 0.79% which is INSANE. I wish I had a better fund to invest into the nifty 250 microcap over the long haul, but I suppose it is what it is lol.
flin much lower expense ratio and better dividend
80% of the market is owned by institutions. The institutions decide what stocks will be over or under valued. Most likely the reason politicians have the best returns.
thanks Sven excellent review about value and current state of the market. Completely agree with compounding as we have been very fortunate to have been with Google since 2007. This is not the time to chase technology as most of these AI companies on the venture side will fail in the first year. Nvda cant keep the market and AI story chasing up forever.
what i want is an evaluation of indo foods
:-)
🗽 Yes, value is what you get... but you must be very patient to find that value! 👌
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Value is scary as well because a company which isn't really growing can get one day beaten by even a small tech innovation.
@@sylvainh2o Maybe in one segment... but the big company can take over the small competitor.
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Inflation informs rates.
Rates decide the multiple for stocks.
Our productive capacities are extreme now so inflation can be controlled fairly easily with just more output. Meanwhile most new services and goods produced by massive automation don’t even factor in inflation figures (think Google, RUclips, etc).
It’s a different world now.
US has been increasing output? I think it's service based economy which lives on debt...
Aperam was one of the stocks you evaluated during your Amsterdam stock exchange analysis.
You said you will take a closer look under a price of 30, it is 26 now. What is your opinion on the current price? Also the steel price changed quite a bit since your last analysis.
Might be a cyclical opportunity.
I've seen some weakness in the steel industry, but without a recession, it is likely just a shorter term thing with high risk
@@Value-Investingappreciate your reply. At 25 now, so another 4% cheaper for the same business. 😉
I am no tesla fanboy. I am alibaba stock holder. Alibaba heartbreakingly doing nothing but drop. It hurts but you give me the spirit to keep looking at fundamental cashflows and buybacks and dividends. Thank you i appreciate your work, it really helps me while the whole market is laughing about my decision
BABA’s problem is rooted in geopolitics of DC vs Beijing, yes?
@@TheRustyLM Their cashflow is also dropping and revenue is stagnant. PDD (aka Temu) is eating their lunch. But no, it is the Tesla fanboys and the shorters...
Hey Sven, thank you for your videos. Have you ever looked into Watts Water technologies ? It may be a company you would like
thanks for suggesting!