My major learning from 2023 can be found in Miyamoto Musashi’s “Dokkōdō”:
Be indifferent to where you live.
Miyamoto Musashi
I shouldn’t allow myself to become overly attached to a specific location or let my happiness be dictated by my surroundings. If my home country treats me poorly, I shouldn’t feel obligated to stay. However, I also shouldn’t expect to find happiness by moving somewhere else in the world. I can find contentment wherever I choose to live. After all, living is living, regardless of the location.
Today is Monday, 1st January 2024 and I created two new Value Dividend Portfolios. One portfolio representing undervalued stocks with no dividend payment and the second portfolio undervalued stocks with significantly high dividend payments.
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.
2024 Portfolios
Both portfolios focus solely on the U.S. market and have the following in common:
Piotroski F-score of ≥ 6.00
Altman Z-score of ≥ 3.00
Equity Ratio of ≥ 50.00%
The first portfolio paying no dividends focuses on stocks with:
P/E ratio of ≤ 10
Dividend yield of 0%
The second portfolio paying significant dividends focuses on stocks with:
P/E ratio of ≤ 7
Dividend yield ≥ 2.9%
1. 2024 No Dividend Portfolio
»The Value Dividend Strategy« portfolio paying no dividends consists in total of 7 stocks:
Gulfport Energy Corp GPOR with a current price of $133.20
SurgePays Inc. SURG with a current price of $6.45
MasterCraft Boat Holdings Inc. MCFT with a current price of $22.64
Arcturus Therapeutics Holdings Inc. ARCT with a current price of $31.53
Atkore Inc. ATKR with a current price of $160.00
Profire Energy Inc. PFIE with a current price of $1.81
Livent Corp LTHM with a current price of $17.98
2. 2024 High Dividend Portfolio
»The Value Dividend Strategy« portfolio paying significantly high dividends consists in total of 12 stocks:
ClearOne Inc. CLRO with a current price of $1.08
Chesapeake Energy Corp CHK with a current price of $76.94
Adams Natural Resources Fund Inc. PEO with a current price of $20.63
PhenixFIN Corp PFX with a current price of $42.25
Alliance Resource Partners L.P. ARLP with a current price of $21.18
Cal-Maine Foods Inc. CALM with a current price of $57.39
Stifel Financial Corp 5. SFB with a current price of $20.55
PHX Minerals Inc. PHX with a current price of $3.22
HF Sinclair Corp DINO with a current price of $55.57
Medifast Inc. MED with a current price of $67.22
BlackRock Enhanced Capital and Income Fund Inc. CII with a current price of $19.00
Mesa Royalty Trust MTR with a current price of $13.20
Outlook
Both portfolios have been created solely by stock screening. As shown in »The Value Dividend Strategy«, these portfolios have performed exceptionally fine historically. I highlighted the most promising companies in bold.
This time I’ll look into each company in detail. I will perform a proper due diligence and valuation of each stock to create a third »The Value Dividend Strategy« portfolio with the aim of identifying winners while excluding any company raising a red flag. I might also write deep dives on the most promising stocks.
Subscribe to this newsletter if you wish to receive this portfolio and any deep dives I might write!
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.
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.
Over the past 2 years, I have really come to understand what I believe to be the most important pillar of a functioning society:
A large, harmonious, loving family.
In the western world, we grow up and often have the urge to move out of our parents’ home as soon as possible. I think it is a natural and healthy urge.
It reminds me of the story of Abraham (Genesis 12:1) where God says, “Leave your country, your family, and your father’s household for the land I will show you.
It is something I did as soon as I graduated from high school, and it led me to Australia, on the other side of the planet. An urge that brought me to Tenerife, also thousands of kilometers away from my family. And I also believe that it is this natural urge that motivates us to travel the world.
My life so far is a mirror of the story of the prodigal son told by Jesus in the book of Luke (Luke 15:11), where a son leaves his father’s house, squanders his inheritance in a distant land, and then decides to return home. Upon his return, he is warmly welcomed by his father.
It is only by leaving our own country, our own family, that we can see our own country and our own family with much-needed clarity. It allows us to appreciate — and it allows us to criticize, to return and to improve.
Distance brings that much-needed clarity. Clarity to honor your family and your homeland. Clarity to truly understand one of the Ten Commandments (Exodus 20:12): “Honor your father and your mother, so that you may live long in the land the Lord, your God, is giving you”.
Attending my best friend’s wedding and being generously hosted by his family introduced me to the concept of Silat Al-Rahm, an Islamic practice of maintaining strong family ties — similar to, but even deeper than, this commandment. My friend also left his native Uzbekistan to study and live in Germany, only to return to his family. Despite all the opportunities he could have had in Germany, he moved back. And when I visited him, I could feel how his noble personality really blossomed when he connected with his relatives, met them, and helped them.
Silat Al-Rahm includes actions such as greeting, socializing, caring for relatives, providing financial and personal help, and upholding their honor.
The Prophet Muhammad (peace be upon him) is reported to have said, “Whoever wants to have more income (Rizq) and to leave a better legacy (or a better life), he must connect with his Rahm.
Hinduism also views family life as a sacred activity and an important environment for passing on dharma (karma) from one generation to the next.
As recently as two years ago, I felt that I needed some distance from my family to protect myself and especially my children from generational trauma and beliefs.
But I learned that by seeking distance from our family, we create an even greater distance within ourselves. We cannot heal generational trauma by running away from it. No matter how great the physical distance, we are always connected to our family on a metaphysical level.
We are one.
There is an inherent unity, a deep connection between all beings – especially to our family.
This unity and interconnectedness is found in many spiritual and philosophical traditions: the Buddhist teachings of interdependence, the Hindu concept of Brahman, the Christian idea that all believers are united in Christ, and the Islamic concept of Tawhid: the indivisible unity of God.
In the face of deep – possibly generational– trauma or intense conflict within the family, love and unity for one’s family may seem impossibly difficult.
Gaining some distance – as in the story of Abraham or Luke – gives us the ability to uplift ourselves, to gain the much-needed clarity and strength to return to and unite with our family.
A story found in both the Bible and the Quran is that of Joseph or Yusuf. Joseph’s/Yusuf’s brothers sell him into slavery out of jealousy. He later rises to a position of power and is able to forgive his brothers and provide for them during a famine, demonstrating the power of forgiveness and reconciliation within families.
The Tao concept of Wu Wei (non-action) can help to forgive and achieve family reconciliation. We leave behind the big list of how our family “should be” and accept them as they are.
By practicing loving kindness to everyone around us, we will eventually find ourselves in a paradise of unconditional love.
From its inception, everything we could browse on the Web — text, images, video — was created by human creativity and thought. Anything written or created had to pass a quality standard test we might call proof-of-work: you had to do the work (think, write, publish) to put content on the web.
In the last 12 months, that proof-of-work has been broken. You can now write entire blog posts and books with LLM like ChatGPT. Not surprisingly, an increasing amount of content on the web is now written by LLM — not by humans.
There is nothing wrong with AI content per se, the question is whether we want to know if an article was written by AI without being labeled as such. I prefer to know.
There’s a difference between someone who sits down for many hours and does the hard work of carefully crafting an article using their own thinking and creativity, and an article that’s automatically generated by an AI tool.
We are at a crossroads where it makes sense to think about how we can design a web for the AI age. How can we redesign the web to distinguish between authentic human-generated content and machine-generated content? I am against regulation, and creating a separate web just for humans sounds promising but impractical.
Perhaps we could use the proof-of-work required for human-created content to create an algorithm that confirms the authenticity of human-created content. Authors who created content using such software could then use a label that identifies their work as authentically human. Think of it like an organic food label.
I’m sure that closed publishing networks or sites will emerge that will place a unique label on authentically human content. It is time to design and launch them.
For over one and a half years did I now live in a very sunny but very unambitious place. Over the past six to nine months, I complained a lot about the latter. When I did, many people claimed a correlation to the weather:
Ambitious regions are not sunny – and sunny places are not ambitious.
At first, I was convinced. Spain, Italy, and Greece are all countries not blessed with ambition.
But I quickly realized that this is a flaw.
Firstly, some of today’s most ambitious regions are located in fairly sunny places: Silicon Valley, Shenzhen, Singapore, Hong-Kong, Dubai, Tel Aviv, Los Angeles, Miami, Austin, Amaravati, and many more are upcoming.
Secondly, historically we saw the most advanced societies and many inventions coming out of very sunny regions:
The Mesopotamian Empire, located in the sunny region of the Middle East, is often credited as the cradle of civilization. It was here that many fundamental elements of modern society, such as written language and agriculture, were first developed.
The Egyptian Empire, situated in the sunny and arid region of North Africa, was a hub of innovation and wealth. It was known for its advancements in architecture, mathematics, and medicine.
The Persian Empire, another sunny region in the Middle East, was known for its wealth and cultural advancements. It was a center for the arts, technology, and science.
The Roman Empire, which spanned across sunny regions in Europe and the Mediterranean, was known for its engineering marvels, legal system, and advancements in arts and literature.
The Byzantine Empire, headquartered in modern-day Turkey, a region with a sunny climate, was known for its wealth derived from its strategic location controlling trade routes between Europe and Asia. It was also a center for arts, technology, and science.
Long story short, there is no correlation between ambition and weather. Rather, I assume it is a phenomenon of the rise and fall of nations. Today’s unambitious regions have all once been powerful empires. At their height, the mentality of the people changed from ambitious to comfortable. And with comfort came the decline. This comfort ingrained itself heavily into their culture, which now obstructs these regions to rise into ambitious and prospering regions. It seems hard to switch from comfort to ambition – yet with enough hardship and the right leadership it seems possible.
In a globalized world, we can luckily choose where we want to be. We can decide to move to more ambitious regions. By doing so, the ambitious atmosphere in these regions will infect us as individuals and allow us to become the best version of ourselves.
I believe that many couples who successfully used a dating app to find their soul mate did so with a sincere conscious or subconscious intention. This sincere subconscious intention created vibrations in the quantum field. This allowed two souls to connect telepathically. The app was then merely the technology that brought those two souls together in our reality.
Science is that it is a rigorously structured system, meticulously designed and refined over decades, to investigate the present level of reality framed within our current technological and scientific nexus of thought. However, the moment we venture to investigate phenomena beyond this established framework, the supernatural, we encounter resistance. Anything beyond the current technological nexus is dismissed as impossible.
If we really want to see breakthrough innovations, if we really want to make an evolutionary leap forward, science must open itself to the impossible.
I am referring to areas such as energy or quantum healing, the potentials of zero-point energy, the enigmatic technologies of UFOs, the vast landscape of consciousness and the transformative effects of psychedelics upon it.
The next chapters of scientific discovery await in the prospects of telepathy, the frontiers of artificial superintelligence, the intricate art of matter manipulation, the theories of interdimensional travel, and the concepts of antigravity and warp drive technologies.
This level of progress requires leaving the rigid confines of current science and using an elevated state of consciousness to find answers to what is now called the impossible.
What we focus on today, as individuals and as a society, determines where we’re going. It determines how our future and the future of our children will look like.
Today, our collective focus is stuck in wars, conflicts, economic recessions, inflation, housing costs, gender debates, and much more dividing nonsense.
This all distracts from where our attention should be: a positive, peaceful, progressing, free, abundant, and united future.
Advancing technologically as well as spiritually.
The most I can do individually is to focus my attention on a desirable future
This means recognizing but minimizing the fear and anxiety inducing political chaos.
It means focussing my energy on an ethical and exciting future. Because:
In my book The Value Dividend Strategy, which was published at the end of November 2002, I provided readers with two portfolios that at the time met the criteria of Value Dividend stocks. This article analyzes the performance of these portfolios after one year.
Background
On October 21, 2022, I screened the U.S. stock market against the criteria of The Value Dividend Strategy. As a result, I created two portfolios: one focused on value stocks that paid significantly high dividends, and one focused on value stocks that paid no dividends at all.
In this performance review, we will evaluate the one-year performance of the two portfolios I created as of October 2022. Due to the publication date of my book, this performance review looks at the 1-year performance from October 21, 2022 through October 20, 2023. In the future, I will track and publish performance updates on an annual basis from January 1 through December 31. Therefore, as a subscriber, you can expect updated Value & Dividend portfolios on January 1st, 2024.
At the time of creation, all stocks in the Value & Dividend portfolios had a low price-to-earnings 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.
Incidentally, in my book I emphasized that the value dividend strategy is particularly effective and yields the best returns when implemented toward the end of a recession. Keep in mind that this was not the case on October 21, 2022.
The Dividend Portfolio
The high dividend Value Dividend Strategy portfolio consisted of 14 stocks.
The 1-year performance since inception of the portfolio is 17.31% excluding dividends paid.
The average dividend yield of this portfolio at inception was 4.2%.
The average performance was 17% with a standard deviation of 21%.
The average dividend yield was 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%.
Hypothetically, if we’d only invested in the five best performing stocks, we could have returned 38% on undervalued value stocks.
The question I’ll be answering in this publication through selected deep dives is how we can identify these winners early. If you haven’t already, please consider subscribing.
The Non-Dividend Portfolio
The non-dividend paying Value Dividend portfolio consisted of 21 stocks.
The total 1-year performance since the portfolio’s inception is 15.04%.
The Value Dividend portfolio, which pays no dividends, had an average performance of 15% with a standard deviation of 36%. This standard deviation is quite high as some stocks performed exceptionally well (100.70%) while others had large losses (-60.06%).
Hypothetically, investing in the 5 best performing stocks would have resulted in a 64% gain – on low P/B value stocks!
With non-dividend paying value stocks, the challenge is to weed out the bad performers while focusing on the high performers. That is what I will be focusing on in this newsletter. If you haven’t already, please consider subscribing.
Distributions
The Dividend Portfolio shows a more or less normally distributed performance curve, with most stocks clustered around moderate returns. This distribution suggests a relatively stable and less volatile investment landscape where gains are modest but more consistent.
On the other hand, the non-dividend portfolio has an intriguingly skewed performance distribution, with returns spread over a wider range, including some significant outliers. This implies a higher risk/reward profile, with both significant upside potential and downside risk.
Interestingly, the data shows that this higher volatility is positively correlated with lower price-to-book ratios, suggesting that undervaluation may be a catalyst for these extreme performances.
Outpacing the Indices
Let’s put those performances into perspective. Over the same period, the S&P 500 gained a respectable 10.75% and the Vanguard Value Index Fund ETF (VTV) lagged with a modest gain of 1.44%.
In stark contrast, both Value Dividend Strategy portfolios delivered returns that significantly outperformed these benchmarks.
The Dividend Portfolio outperformed the S&P 500 by 61% and the VTV Index by 1.100%.
The non-dividend portfolio outperformed the S&P 500 by 40% and the VTV Index by 942%.
This serves as a powerful assertion that the Value Dividend Strategy may be more than just a theoretical construct – it may be a roadmap for achieving superior returns with undervalued stocks.
As a result, I will be constructing Value Dividend Strategy portfolios on January 1 of each year, including an annual performance review. If you haven’t already, please consider subscribing.
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.
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.