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.
First: As soon as Israel acts absolutely ruthlessly in Gaza, we will see massive violent protests (if not terrorist attacks) in Europe by integration failures from the Middle East and Maghreb.
Integration failures are illegal migrants who have come to the EU (especially Sweden, Germany) since 2015, but have not integrated, but have been criminalized / radicalized in a parallel society.
Second: The war in Israel will lead to another massive migrant crisis in Turkey and the EU. The capacity to take in more refugees is exhausted in most countries – especially Turkey and Germany.
To make room for real war refugees, the EU must immediately launch a massive and consistent remigration for illegal and criminal immigrants and all rejected asylum applications.
Third: In addition, Hamas could use war refugees to try to smuggle terrorists into the EU.
The EU must immediately and without exception implement border controls and take strict measures to immediately detect and turn back radicalized Hamas terrorists at the border.
These measures must be implemented within hours, not days.
The PayPal Mafia is the most fascinating phenomena of the entire history in business.
A group of people – seemingly randomly – work on a startup, exit, and each founder and employee ends up (co-)founding companies which re-defined the entire internet as we know it.
Tesla, SpaceX, Palantir, The Boring Company, Neuralink, OpenAI, FoundersFund (arguably Facebook), Affirm, Yammer, Sequoia Capital, YouTube, LinkedIn, Yelp, 500 Startups, Geni.com, and through acquisition X (formerly Twitter).
Let’s look at the current valuation of each:
Tesla: 795 Billion
SpaceX: 140 Billion
Palantir: 33 Billion
The Boring Company: 5.5 Billion
Neuralink: 5 Billion
OpenAI: 80 Billion (est.)
FoundersFund: 11 Billion (in assets)
Affirm: 6.5 Billion
Yammer: 1.2 Billion (acquired by Microsoft)
Sequoia Capital 80 Billion (assets under management)
YouTube: 1.6 Billion (acquired by Google; today’s valuation is estimated to be 180 Billion)
LinkedIn: 26.2 Billion (acquired by Microsoft)
Yelp: 2.9 Billion
500 Startups: 2.4 Billion (assets under managemet)
Geni.com: >>100 Million (acquired by MyHeritage for indisclosed amount)
X: 44 Billion (acquired by Elon Musk who holds as the largest shareholder 9.2% of the company)
Someone asked about an optimistic prediction about the future 10 years from now.
As an e/acc optimist myself, here’s the ideal:
Human aligned AGI reached.
The world transforms into a utopia of efficiency.
AGI, synergizing perfectly with human ingenuity, catalyzes unprecedented innovation across sectors; amongst them unlimited free energy.
Economies skyrocket, with wealth equitably distributed, eliminating poverty and fostering global prosperity.
Individual creative and entrepreneurial endeavors flourish as mundane tasks are automated, unleashing human potential to its fullest.
The Law of One is recognized on a mass-scale, revealing the interconnectedness of all beings. Altruism and mutual support become the norm, reshaping socio-economic systems and ushering in a harmonious society and shared spiritual growth.
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