The core of worth investing is making the most of market irrationalities by discovering low threat and high benefit investing opportunities. To put this value investing principle into a visual viewpoint I have developed the Value Investing Quadrant.
My passion is to try to find low danger high reward investment opportunities. I use my accounting abilities and investing experience in order to discover interesting financial investment ideas that provide the possibility to lead me towards my monetary objectives.
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0:00 Worth Investing Risk Reward.
3:30 Worth Investing Quadrant.
4:27 Danger and Reward.
5:37 BRK Example.
ULTA.
ADM.
NUTRIEN.
SAMSUNG.
TELEPERFORMANCE.
DHL.
BCE.
AGRANA.
BERKSHIRE.
AUSTRIA.
ASML.
PERNOD.
NESTLE.
DIAGEO.
APPLE.
L'OREAL.
TESLA.
NVIDIA.
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To paraphrase Howard Marks, if high risk meant high reward it would not be high risk
yep!
Hey Sven do you think Pagaya Technologies (PGY) is a good value investing opportunity? Thanks!
no idea 🙁
@@Value-Investing Thanks for replying Sven. I’m sure you must be aware of the market’s reaction to Alibaba’s Earning report today. It seems fundamentals don’t reflect stock price. I wonder if there is any point to investing in China if there is so much negative sentiment and mistrust towards Chinese stocks. What’s your opinion?
Fama and French explain that value stocks are actually riskier because the underlying companies are highly distressed, which explains the excess returns of value investing. It’s almost never ‘low valuation = low risk’; more often than not, companies have extremely low valuations when they’re on the verge of bankruptcy because estimates have not yet caught up with prices.
Of course. Shitty companies are also cheap.
Value investing doesn’t mean buying low PE companies. It just means buying companies at a discount and below fair value. If you determined a fair PE for a company was 50 and it trades at 30, that’s value investing
That’s the difference between “value” and “value trap”. Apple was a great value at PE 10 for example.
@aightm8 never once did I say “low P/E”. Value investing is typically based on P/B, but isn’t always. And what you say is easier said than done: generally speaking, the market is correct on price, so buying something ‘below what it’s worth’ is near impossible.
There are no value stocks as such. There are good and bad companies and everything in between. They can change based on their fundamentals. Value investing is looking for good fundamental companies and then buying those when they’re undervalued. Or some even buy at fair value. But many desire a margin of safety which reduces the risks mentioned in this video. You are talking about bad companies at low prices. Avoid bad companies altogether.
I’m currently doing my bachelor’s in economics and business administration and yes, the conventional knowledge in finance and investing is all about high risk / high reward, which is completely irrational! This conception mixes risk with uncertainty, as they think that risk is the standard deviation of an asset’s expected return. This is just a statistical value for uncertainty and not risk but the two are conflated in SML and CML models.
🙂
Links to the discussed stocks, we did some analyses recently 🙂
ULTA https://www.youtube.com/watch?v=bVAVTIjtapI
ADM https://www.youtube.com/watch?v=_30SLDQzJ-E
NUTRIEN https://www.youtube.com/watch?v=yup8cFOITXE
SAMSUNG https://www.youtube.com/watch?v=zI70-4i02cY
TELEPERFORMANCE https://www.youtube.com/watch?v=XjozyeenlFQ
DHL https://www.youtube.com/watch?v=87fEIE3MAww
BCE https://www.youtube.com/watch?v=_cBuKmaeo9s
AGRANA https://www.youtube.com/watch?v=ThsmWmrpsAk
BERKSHIRE https://www.youtube.com/watch?v=fu1-3P7UPyM
AUSTRIA https://www.youtube.com/watch?v=izFV3cZS4SU
ASML https://www.youtube.com/watch?v=rmR3pgy4SU0
PERNOD https://www.youtube.com/watch?v=Lr0gvEKxNM8
NESTLE https://www.youtube.com/watch?v=gvDD-m3wRUQ
DIAGEO https://www.youtube.com/watch?v=Lr0gvEKxNM8
APPLE https://www.youtube.com/watch?v=evu6ipzMWkk
L’OREAL https://www.youtube.com/watch?v=v0q9xaUre_w
TESLA https://www.youtube.com/watch?v=_XAH6C8PW8c
NVIDIA https://www.youtube.com/watch?v=GtDT5R4LWVQ
Thank you, Doc! 👍
I bought Berkshire in 2020, made 160% until now and will hold it forever 📈🚀
that is the way to go!!!!
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TSLA’s recent price movements are one of the most irrational things that I have seen.
just normal gambling
Forget about the quadrant. Berkshire is always a buy 🙂
YES!
Great video Sven, as alwats. Sold 50% of the portfolio, having 20% cash. Made 250% in less then 4 years. Insane market. 30% used to pay off my morgage. Im just enjoying life and keep
saving and accumulate cash for future buys.
great!!!!
Bought today some Hershey stocks, the balance sheet is clean, the stock came down a lot, nice dividend… all i like to see in a stock! 🙂 Nice video as everytime, glad to be your viewer! 🙂
thanks for sharing!
When Mr. Buffet dies, which clearly I am not rooting for, but statistically will happened sooner rather than later… Shareholders of Berkshire being human, will lose their minds knowing Warren will no longer be steering the ship.
We know his generals will run the company according to his long term vision and instruction, but I still anticipate a massive drop in the equity on uncertainty.
In the big picture is probably a non factor but in the short term… It is a factor with Berkshire.
His captains were self-made millionaires – that is the reason that he hired them. But I do hope that it drops like a rock because I will be buying the entire down trend.
Waiting on some chinese stock, baba? Bidu? Tencent? why no specific video on one of them
Nice tool Sven.
Another idea for a video would be miners (gold, lithium, silver, iron etc) like Rio Tinto or Glencore.
I believe there’s definitely value to be found in this sector but I have trouble with interpreting the financials.
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Investing early is like watering your future; each drop today turns into streams of wealth tomorrow.
Oh, really? I have never thought of that as an option. Can I ask who it is you’ve been working with? I bet I could use some help myself.
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I’ve just begun learning about value investing, and I’ve found that many good stocks are undervalued despite their intrinsic value. If you had quarter of a million to create a strong portfolio, which stocks would you choose for better returns?
I think a good portfolio should have three basic things: ETFs for diversification, dividend stocks for cash flow, and leading tech stocks. With your budget, it’s a good idea to talk to a fiduciary advisor for expert advice.
I agree with you. As an early investor in NVDA, AVGO, ANSS, and PLTR, my financial advisor’s advice was incredibly helpful. Over the past 7 years, she has helped me find stocks that did 10x multiple times. With her help, I’ve grown my portfolio to over a million dollars.
Hey, I’m trying to find a certified one to boost my investments/portfolio, but it’s tough online. Can I get a rec from you, since you know about this stuff?
*Marissa Lynn Babula* is the advisr I use and i’m just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
Glad i stumbled onto this. I found her web page and have sent her a mail, waiting on her response. Thanks for helping
Love your quadrant and explanation, Sven. As always, I deeply appreciate your content. Keep up the great work! Pfizer might be something to look at right now because people are afraid of the RFK Jr. appointment. They seem to believe that all pharma stocks are bearish right now. 😊
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Sven you have a great channel.
Sven, you should use this colored quadrant, is more intuitive and more appealing then the white one. Green good, red bad, more easy to understand.
Question: It seems that reward is correlated with price risk.
This is illustrated when you show that when there is a crash, the S&P500 movers diagonally. It should move horizontally or vertically not both.
Why not take price risk out and just consider business risk vs reward?
Maybe my question really is: what metrics are on the x and y axis?
Would be great if you could revisit lithium/solar investments. They are quite a bit lower now than the beginning of the year.