Marius Schober

Progress Through Consciousness

  • A Performance Review of »The Value Dividend Strategy«

    •

    9 min read

    Introduction

    In my book “The Value Dividend Strategy”, which was published in late November 2022, I provided readers with two portfolios which, at that time, fulfilled the criteria of what I named The Value Dividend Strategy.

    The book is based on extensive research I did as part of my bachelor thesis. In my research process, I stumbled upon value stocks which outperformed not only the market but nearly as often also the general value portfolio they were part of.

    These stocks were in particular undervalued stocks which either pay a significantly high dividend or no dividend at all. For investors, these stocks are raising suspicion as outliers. An extremely high dividend seems too good to be true, while the lack of dividends is equally unusual for value stocks. As it turns out, these stocks historically performed phenomenally good, especially towards the end and coming out of a market recession.

    After I published my book and sold the first hundreds of copies over the recent months, a handful of investors asked me to please regularly update the Value Dividend portfolios and to extend my research. With this newsletter, I will create and update the Value Dividend portfolios every quarter and transparently publish performance reviews of how each portfolio performed in the past. Furthermore, I will identify the winning stocks of each portfolio, which were raising the performance, and write deep dive analyses on these selected stocks. Another part I deem extremely important as an investor is an understanding of the macroeconomic environment – not to time the market, but to identify opportunities where others cannot yet see them. In this newsletter, Value & Dividends, I will also write research newsletter on undervalued sectors and macroeconomic opportunities and risks.

    Q4 2022 Value Dividend Portfolios

    On 21st of October 2022, I screened the U.S. stock market according to The Value Dividend Strategy criteria. As a result, I created two portfolios: one focused on value stocks which paid a significantly high dividend and one focused on value stocks which paid no dividends at all.

    In my book, I emphasized that The Value Dividend Strategy is particularly effective and yields the best returns when implemented towards the end of a recession. Nevertheless, in this performance review, we will assess the performance of the two portfolios I established in October 2022.

    I never expected that I’d expand or delve into the portfolios again. For this reason, I will focus for simplicity on the performance of the portfolios from the date of the creation of the portfolio (21/10/2022) to today (13/07/2023). Thereby we’re looking at the performance after approximately 8.8 month or 38 weeks.

    However, moving forward, I will track and publish performance updates on a quarterly, half-yearly, and yearly basis.

    At the time of creation, all stocks within the Value Dividend portfolios displayed a low P/B ratio, high or no dividend payments, an Altman Z score of > 2.99, a Piotroski F-Score of >6, and an Equity-to-asset ratio of <0.5.

    Performance of the Dividend Portfolio

    The Value Dividend portfolio with high dividends consisted of 14 stocks.

    As I am writing this, the overall performance since creation of the portfolio is 26.48% excluding paid-out dividends.

    The average dividend yield of this portfolio was 4.2% at the date of creation.

    The average performance of 26% comes with a standard deviation of 31%. The highest performance showed InterDigital Inc. (IDCC) with 104% while Valero Energy Corp (VLO) performed worse with -8% – simultaneously VLO was the only stock in this portfolio with a negative performance.

    The average dividend yield is approximately 4.19%, with a standard deviation of 1.84%. This indicates a wide range of dividend yields among the companies, with a maximum yield of 8.98%.

    When we look at the distribution of stock performance, we can see that most of the stocks have gained between 0% and 40% with two notable exceptions exhibiting a much higher performance.

    When we look at the correlation between performance and dividend yield, we can see a moderate positive correlation. This suggests that higher-performing stocks also tended to have higher dividend yields, which proves the point of The Value Dividend Strategy.

    Top 5 Performers of the Value Dividend High Dividend Portfolio:

    1. InterDigital Inc IDCC with a gain of 104%
    2. Patrick Industries Inc PATK with a gain of 91%
    3. LCI Industries Inc LCII with a gain of 35%
    4. Ingredion Inc INGR with a gain of 34%
    5. Celanese Corp CE with a gain of 32%

    Hypothetically, by investing in these five stocks, one could’ve achieved a return of 59% with – important to note – value stocks.

    Bottom 5 Performers of the Value Dividend High Dividend Portfolio:

    1. Valero Energy Corp VLO with a loss of 7.6%
    2. Exxon Mobil Corp XOM with a gain of 2%
    3. Phillips 66 PSX with a gain of 4%
    4. Global Partners LP GLP with a gain of 8%
    5. Huntsman Corp HUN with a gain of 9%

    As we can see, particularly VLO has been a bad pick. The question is not why VLO had been a bad pick, but how we can avoid picking losers in the future altogether. I want to answer this question in this continuous newsletter by through deep dives, not only in promising Value Dividend stocks but also into suspicious ones and perform a due diligence, valuation, and margin-of-safety calculations. If you haven’t already, I welcome you to subscribe!

    Performance of the Non-Dividend Portfolio

    The Value Dividend portfolio which paid no dividends consisted of 21 stocks.

    As I am writing this, the overall performance since creation of the portfolio is 26.06%.

    In the Value Dividend portfolio which pays no dividends, the average performance was 26% with a standard deviation of 47%. This standard deviation is quite high, as some stocks performed exceptionally well (155.79%) while others showed high losses (-46.18%).

    Looking at the distribution of returns, we see that most of the stocks in the Non-Dividend portfolio show returns of 0 to 60% with a few notable exceptions exhibiting much higher or lower performance.

    This was to be expected, as I observed similar high standard deviations during my study of Value Dividend stocks. Yet, as we can see, with a performance of 26% of the overall portfolio we still achieved higher returns than the S&P 500, which gained 13.23% over the same period of time.

    When we look at correlations, it may be worth noting that there is a moderate negative correlation between performance and P/B ratios. Stocks with a higher performance had lower P/B ratios which may be because they were undervalued.

    Top 5 Performers of the Value Dividend Non-Dividend Portfolio:

    1. Builders FirstSource Inc BLDR with a gain of 156%
    2. AutoNation Inc AN with a gain of 86%
    3. Asbury Automative Group Inc ABG with a gain of 78%
    4. GMS Inc GMS with a gain of 70%
    5. US Goods Holding Corp USFD with a gain of 62%

    Hypothetically, investing in these 5 Value Dividend stocks would’ve resulted in a 90% gain with low P/B stocks.

    With non-dividend paying value stocks, the challenge is to weed out the bad performers, while focussing on the high performers.

    Bottom 5 Performers of the Value Dividend Non-Dividend Portfolio:

    1. United Natural Foods Inc UNFI with a loss of 46%
    2. Ascent Industries Co ACNT with a loss of 37%
    3. Stride Inc LRN with a loss of 20%
    4. TrueBlue Inc TBI with a loss of 18%
    5. DLH Holdings Corp DLHC with a loss of 17%

    By looking at the bottom performers, it becomes clear how risky this strategy can be, if focussed on the wrong stocks and if one avoids diversification. With diversification, the overall portfolio nevertheless gained 26% – despite having several double-digit loss stocks in the portfolio.

    As part of this ongoing Value & Dividends newsletter, I will dive deep into individual non-dividend paying stocks, to learn how we can promptly avoid investing in these losers stocks.

    Subscribe now

    Index Performance

    To set these performances in perspective: Over the same period of time, from October 21, 2022, to today, the S&P 500 gained 13.23% and the Vanguard Value Index Fund ETF (VTV) gained 8.88%. Thereby, both Value Dividend portfolios outperformed the index and the overall value index.

    The bar graph provides a visual comparison of the performance of four different portfolios from October 21, 2022, to July 13, 2023.

    If you want to learn more on how I discovered this strategy and how the portfolios were created, you can read my book online or order a copy from amazon.com.

    Résumé

    Since publishing my book The Value Dividend Strategy, we can see that Value Dividend portfolios still outperform the index and large diversified value portfolio. With this newsletter and blog, I will continuously update, refine, and expand The Value Dividend Strategy. I will dive deep into selected promising or suspect Value Dividend stocks to find clear winners and loser within the small range of Value Dividend stocks.

    Furthermore, I’ve been majorly invested in Palantir PLTR which does not fulfill Value Dividend criteria per se, but which was a stock clearly undervalued in 2022 and gained in 100% since October 21st 2022. As soon I detect other unique undervalued growth stocks, they will also have their place in Value & Dividends.

    In combination with critical macroeconomic analysis, I aim to provide real value and real dividends to readers of this newsletter.

    If you haven’t already – I invite you to join the Value & Dividends community and I appreciate your subscription to this publication.

    Sincerely yours,
    Marius Schober

    Twitter: @mariusschober
    LinkedIn: Marius Schober

    Legal Disclaimer

    The content provided in this newsletter is for informational purposes only. The information, analysis, and opinions expressed herein are solely those of Marius Schober and do not represent, reflect or express the views of any other person or entity.

    This newsletter does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and you should not treat any of the newsletter’s content as such. Marius Schober does not recommend that any securities, transactions, or investment strategies mentioned in this newsletter are suitable for any specific person.

    The information provided in this newsletter is obtained from sources believed to be reliable, but Marius Schober does not guarantee its completeness or accuracy, or warrant its completeness or accuracy. Readers are urged to consult with their own independent financial advisors with respect to any investment.

    All information and content in this newsletter are subject to change without notice. Prices, quotes, and other financial information may be out of date or inaccurate. Past performance is not indicative of future results. Investing in securities involves risks, including the potential loss of all amounts invested.

    Marius Schober does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of reading any of our publications. You acknowledge that you use the information we provide at your own risk.

    By subscribing to this newsletter, you acknowledge and agree to the terms of this disclaimer.

    0

  • Progress Through Consciousness

    •

    1 min read

    For at least two decades, we have not seen any real progress. Not in science, not in business, not in our real world.

    In order to unlock the secrets that lie beyond Einstein’s theory, delve into the mysteries of UFOs, explore the feasibility of space travel, harness free abundant energy, and achieve global peace, we must explore alternative approaches.

    I believe this approach does not start with science but with consciousness.

    I believe that we can solve our world’s greatest challenges and solve the universe biggest enigmas by using, accessing, and expanding our human consciousness.

    When we collectively expand our consciousness, we will achieve a quantum leap as a human species.

    The way to progress is through consciousness.

    0

  • Fortschritt durch Bewusstsein

    •

    1 min read

    Seit mindestens zwei Jahrzehnten haben wir keinen wirklichen Fortschritt mehr gesehen. Nicht in der Wissenschaft, nicht in der Wirtschaft, nicht in unserer realen Welt.

    Um die Geheimnisse jenseits der Einsteinschen Theorie zu lüften, die Mysterien der UFOs zu ergründen, die Machbarkeit der Raumfahrt zu erforschen, freie, reichlich vorhandene Energie nutzbar zu machen und globalen Frieden zu erreichen, müssen wir alternative Ansätze erkunden.

    Ich glaube, dass dieser Ansatz nicht bei der Wissenschaft, sondern beim Bewusstsein ansetzt.

    Ich glaube, dass wir die größten Herausforderungen unserer Welt und die größten Rätsel des Universums lösen können, indem wir unser menschliches Bewusstsein nutzen, darauf zugreifen und es erweitern.

    Wenn wir unser Bewusstsein kollektiv erweitern, werden wir als menschliche Spezies einen Quantensprung machen.

    Der Weg zum Fortschritt führt über das Bewusstsein.

    0

  • Caution With Rapamycin

    •

    2 min read

    In the quest for longevity, Rapamycin has emerged as a potential contender. Originally developed as an organ transplant drug, this intriguing compound has captured the attention of researchers and biohackers alike. As the debate around its promise unfolds, questions about risk, benefit, and uncertainty take center stage.

    Rapamycin has been tested on multiple species with seemingly promising results in extending lifespan. However, these findings tell only part of the story. While evidence supports its potential benefits, the unknown side effects cast a shadow over the drug’s viability as a longevity treatment.

    When considering any medical intervention, it’s crucial to weigh the risks against the benefits. In the case of Rapamycin, this analysis is fraught with challenges due to the unpredictable nature of life. Asserting that there’s a risk-benefit analysis in this context is fallacious since the risk component cannot be accurately measured or predicted.

    There is no risk benefit analysis when the downside is unknown.

    While emphasizing caution is necessary, it’s also essential to acknowledge the positive aspects of Rapamycin research and the potential breakthroughs it may bring. Striking a balance between optimism and skepticism is crucial when examining novel interventions.

    For instance, ongoing research on Rapamycin has shed light on the molecular pathways involved in aging, providing valuable insights that could pave the way for future treatments.

    As we venture into the realm of longevity research, it’s vital to remember that uncertainty demands careful consideration. The pursuit of extended life should be guided by a healthy dose of skepticism and prudence, without stifling curiosity and innovation.

    We should not take risks with young, healthy and vital people. No proof of harm is required to assert that a drug or an unnatural intervention carries danger. The absence of evidence is not evidence of absence.

    0

  • Life Is Not Rigid

    •

    1 min read

    Life is the distinctive quality of living entities, marked by growth, reproduction, adaptation, and the ability to respond to stimuli.

    Dead are those who have ceased to exist as living beings, having experienced the irreversible termination of their vital processes, leaving behind only memories and remnants.

    By definition, life is not dead. But being alive does still not mean one is truly living.

    True embracers of life have the courage to take risks. They know that the environment may change. They know that their decision may turn out wrong. This is why true embracers of life possess adaptability. If necessity demands it or their spirit commands it – they change course.

    This mix of adaptability and courage fosters growth. It ultimately transcends the fear of being wrong. Leading to a more vibrant and fulfilling existence.

    Life is not fixed. Life is not rigid. Take the risk. Then adapt.

    0

  • My Local Farmer

    •

    1 min read

    My local organic farmer serves as a wonderful reminder that one does not need immense wealth to find joy and happiness.

    He’s living a fulfilled life. His wife shared with me that he spends most of the day in the garden while on Wednesdays and Saturdays, they sell the produce on the market.

    Every day, he’s outside in the sun. He’s eating fresh organic food. This reflects on his appearance. He looks young and vital for his age. Something all biohackers and longevitists try to accomplish with so much force.

    When you meet his gaze, his eyes reflect fulfillment, happiness, and inner peace.

    A small organic farm is all he needs to be satisfied. This leads us to ponder, why do we believe that acquiring massive amounts of wealth is a prerequisite for happiness?

    0

  • Мой местный фермер

    •

    0 min read

    Мой местный органический фермер служит прекрасным напоминанием о том, что для нахождения радости и счастья не нужно обладать огромным богатством.

    Он живет полной жизнью. Его жена поделилась со мной, что он проводит большую часть дня в саду, а по средам и субботам они продают свою продукцию на рынке.

    Каждый день он проводит на свежем воздухе, на солнце. Он ест свежую органическую пищу. Это отражается в его внешности. Он выглядит молодо и полным энергии для своего возраста. Того, к чему так усердно стремятся все биохакеры и сторонники долголетия.

    Когда вы встречаетесь с его взглядом, его глаза отражают удовлетворение, счстье и внутреннее спокойствие.

    Все, что ему нужно для удовлетворения, — это небольшая органическая ферма. Это заставляет нас задуматься: почему мы считаем, что накопление огромного богатства является обязательным условием для счастья?

    0

  • Mi agricultor local

    •

    1 min read

    Mi agricultor ecológico local es un maravilloso recordatorio de que no se necesita una inmensa riqueza para encontrar alegría y felicidad.

    Él vive una vida plena. Su esposa me compartió que él pasa la mayor parte del día en el jardín, mientras que los miércoles y sábados venden sus productos en el mercado.

    Todos los días está afuera, bajo el sol. Él consume alimentos orgánicos frescos. Esto se refleja en su apariencia. Parece joven y lleno de vitalidad para su edad. Algo que todos los biohackers y longevistas intentan lograr con tanto esfuerzo.

    Cuando cruzas miradas con él, sus ojos reflejan satisfacción, felicidad y paz interior.

    Una pequeña granja ecológica es todo lo que necesita para estar satisfecho. Esto nos lleva a reflexionar, ¿por qué creemos que la adquisición de grandes cantidades de riqueza es un requisito previo para la felicidad?

    0

  • Twitter’s Content Problem

    •

    2 min read

    Twitter is a remarkable platform that brings together some of the world’s most intriguing individuals. These people join Twitter to share their ideas, thoughts, and opinions, often leaving the platform better informed and potentially inspired.

    The first issue with Twitter is its repetitiveness. As with other social media platforms, Twitter encourages users to gain popularity by amassing likes and followers. To achieve this quickly, people seek shortcuts, resulting in repetitive content. One idea may be shared in countless ways by numerous users, while a single video might be reposted repeatedly. Consequently, originality on Twitter suffers.

    When users observe someone successfully tweeting about a specific topic, they often mimic or even blatantly copy that individual. While replicating a YouTube video requires effort, it’s all too easy to rewrite or copy a tweet and hit “Tweet.”

    Repetitiveness leads to the second problem: exceptional content gets lost. Twitter is designed for real-time updates, so most tweets in your timeline are relatively new. The more users you follow, the younger the tweets in your timeline will be, meaning valuable insights can be drowned out by those who simply shout the loudest at any given moment.

    As a long-time Twitter user, I believe the platform excels at providing real-time information and fostering discussions. It’s already the go-to source for live updates on global events. In my opinion, rather than competing with YouTube or Substack, Twitter should focus on developing a search engine for real-time information. Users interested in specific events, topics, or local happenings could search for unbiased, relevant live data. Additionally, those wanting to join discussions on particular subjects or articles could easily find and participate in them.

    In summary, Twitter serves as a hub for real-time information and engaging debates. People visit the platform to express their feelings and thoughts. By concentrating on building a platform for real-time information and providing space for debate, Twitter can become the world’s most significant platform for freedom of speech, transforming into the largest global town hall.

    0

  • Twitters Content Problem

    •

    2 min read

    Twitter ist eine bemerkenswerte Plattform, die einige der interessantesten Menschen der Welt zusammenbringt. Diese Menschen kommen zu Twitter, um ihre Ideen, Gedanken und Meinungen zu teilen und die Plattform oft besser informiert und möglicherweise inspiriert zu verlassen.

    Das erste Problem bei Twitter ist seine Wiederholung. Wie bei anderen sozialen Medien ermutigt Twitter seine Benutzer, an Beliebtheit zu gewinnen, indem sie Likes und Follower sammeln. Um dies so schnell wie möglich zu erreichen, suchen die Menschen nach Abkürzungen, was zu wiederholten Inhalten führt. Eine Idee wird auf unzählige Arten von verschiedenen Benutzern geteilt, während ein einzelnes Video wiederholt gepostet wird. Daher leidet die Originalität auf Twitter.

    Wenn Benutzer sehen, dass jemand erfolgreich über ein bestimmtes Thema twittert, ahmen sie diese Person oft nach oder kopieren sie sogar unverhohlen. Während das Nachahmen eines YouTube-Videos Mühe erfordert, ist es allzu einfach, einen Tweet umzuschreiben oder zu kopieren und auf “Tweet” zu klicken.

    Wiederholungen führen zum zweiten Problem: Außergewöhnliche Inhalte gehen verloren. Twitter ist für Echtzeit-Updates konzipiert, sodass die meisten Tweets in Ihrer Timeline relativ neu sind. Je mehr Benutzer Sie folgen, desto jünger sind die Tweets in Ihrer Timeline, was bedeutet, dass wertvolle Erkenntnisse von denen übertönt werden können, die einfach am lautesten schreien.

    Als langjähriger Twitter-Benutzer bin ich der Meinung, dass die Plattform hervorragend für Echtzeitinformationen und Diskussionen geeignet ist. Es ist bereits die Anlaufstelle für Live-Updates zu globalen Ereignissen. Meiner Meinung nach sollte Twitter sich darauf konzentrieren, eine Suchmaschine für Echtzeitinformationen zu entwickeln, anstatt mit YouTube oder Substack zu konkurrieren. Benutzer, die sich für bestimmte Ereignisse, Themen oder lokale Geschehnisse interessieren, könnten nach unvoreingenommenen, relevanten Live-Daten suchen. Darüber hinaus könnten diejenigen, die an Diskussionen zu bestimmten Themen oder Artikeln teilnehmen möchten, diese leicht finden und daran teilnehmen.

    Zusammenfassend dient Twitter als Drehscheibe für Echtzeitinformationen und interessante Debatten. Die Menschen besuchen die Plattform, um ihre Gefühle und Gedanken auszudrücken. Indem sie sich darauf konzentrieren, eine Plattform für Echtzeitinformationen aufzubauen und Raum für Debatten zu schaffen, kann Twitter zur bedeutendsten Plattform der Welt für Meinungsfreiheit werden und sich in den größten globalen Versammlungsort verwandeln.

    0