Hot List Newsletter

Most Recent Hot List Issues

3 most recent issues require subscription. Historical issues can be viewed free of charge.

3/24/2017

Validea Hot List

How Warren Buffett Looks at Market Valuation

Almost all metrics commonly used by investors make the current market look expensive. But one valuation tool favored by Warren Buffett paints a very different picture and shows the market may actually be cheap relative to other investment options.

3/10/2017

Validea Hot List

When Does It Make Sense To Sell a Stock?

For many investors, deciding when to buy a stock can be much easier than deciding when to sell it. But it doesn't have to be that way. Using a disciplined, emotion free approach can make selling a much easier and more successful process.

2/24/2017

Validea Hot List

The Truth About Buffett's Technology Buys

One of Warren Buffett's long known rules is that he doesn't buy what he can't understand. And that rule applied to technology stocks for a very long time. But the positions he has taken in Apple and IBM in recent years appear to show a change in his thinking. Check out our latest newsletter to see what that might mean.

2/10/2017

Validea Hot List

Why Value Investors Need "Mental Toughness"

Buying low valuation stocks can reap rewards over long periods of time. It is important to understand, however, that buying value stocks doesn't work all the time. Value stocks, as group, can go through lengthy periods of underperformance, and the investor with the mental toughness to stick with the strategy stands the best chance of coming out a winner.

1/27/2017

Validea Hot List

Taking a Look at the Meaning of Market Milestones

The Dow hitting 20,000 this week has many investors excited. But do milestones like that actually mean anything with respect to future returns? Read our latest issue to find out.

1/13/2017

Validea Hot List

Revisiting the Market's Current Valuation

With the current bull market continuing to run, we take this opportunity to take a step back and take a look at where we stand from a valuation perspective. In this issue, we analyze the market using a variety of valuation metrics including the Shiller PE, Tobin's Q, and Warren Buffett's favorite valuation indicator, market capitalization to GDP. We also look at how President elect Trump's economic policies may impact the market.

12/30/2016

Validea Hot List

Where Do the Market and Economy Go From Here

As we close out 2016, we take a look at the what the latest economic news tells us and how it may affect the market going forward. In addition, we feature a look at market-cap, equal and fundamental index weighting excerpted from our latest Globe and Mail article.

12/16/2016

Validea Hot List

Taking a Look Back at 2016

After a lackluster 2015, the stock market bounced back strongly in 2016 . But more importantly, there was a major change in market leadership, with small-caps and value stocks overtaking the large growth companies that dominated the two years before. Check out our latest issue to see which of our guru strategies led the way during the year.

12/2/2016

Validea Hot List

Thinking Like a Contrarian - A Look at the Strategy of David Dreman

David Dreman made a name for himself by doing the exact opposite of what most investors were doing. That type of approach can be difficult to follow and require a lot of patience, but it also pays big dividends in the long-term. Read our latest issue to find out more.

11/18/2016

Validea Hot List

The Problem With the Predictions of Experts

We are subject to expert advice all the time in our everyday lives. And the stock market offers potentially the greatest concentration of so called experts of any area. But are these experts right more than they are wrong? And can you make money following their predictions? Check out our latest issue to find out.

11/4/2016

Validea Hot List

Examining the Value Strategy of the Great Benjamin Graham

The late Benjamin Graham may be the oldest of the gurus we follow, but his impact on the investing world has lasted for decades after his death in 1976. Despite being developed over 50 years ago, his investment strategy has continued to produce impressive results. Find out more about how Graham picked stocks in this week's issue.

10/21/2016

Validea Hot List

Lessons From the Gurus

History shows that beating the market over time is incredibly difficult, with more than 80% of fund managers failing to accomplish that goal. But a select group of investors have done exactly that, and they form the foundation of our stock selection system. The latest Hot List issue takes an in depth look at who they are and why we follow them.

10/7/2016

Validea Hot List

A Look at the Investment Strategy of Martin Zweig

Martin Zweig passed away in 2013, but his stock selection principles continue to endure. Our portfolio based on his book Winning on Wall Street has almost doubled the market's return since its inception in 2003. Zweig was a growth investor, and his methodology was dominated by earnings-based criteria. He looked at a stock's earnings from a myriad of angles, wanting to ensure that he was getting stocks that had been producing strong growth over the long haul and even better growth recently -- and he wanted their growth to be coming from the right sources.

9/23/2016

Validea Hot List

Value and Momentum: Perfect Together

Value investing works - and so does momentum investing. Thus, combining the two factors makes for a viable strategy. Such a combination may prevent a value-only investor or a momentum-only investor from suffering through extended periods of underperformance. In this issue of the Hot List Newsletter, we examine the combination of value and momentum investing. We also rebalance the portfolio, adding four new stocks to the Hot List.

9/9/2016

Validea Hot List

The Magic Formula: A Look at Joel Greenblatt's Simplistic Approach

Hedge fund manager Greenblatt's 2005 bestseller The Little Book That Beats The Market, lays out a way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.

8/26/2016

Validea Hot List

The Rate Debate

The debate about what another interest rate hike, the second in the current rate increase cycle which began in December 2015, would mean for the equity market continues to rage on. Will the 6+ year-long bull market begin to show signs of struggle, or will the market continue its upward path? In this issue we examine the impact of rising interest rates on the equity market. And, most importantly, address the bottom line: what should an investor do, if anything, in anticipation of additional interest rate increases in the months ahead?

8/12/2016

Validea Hot List

Investing and the Mindset of an Athlete

With the Olympics underway, a comparison of the mindset of an athlete with that of a successful investor appears to be a timely topic for this week's Hot List Newsletter. And, what better investor to profile with that theme in mind is Benjamin Graham. Graham's earlier years shaped his investment style, which was based on dedication to his craft and humility. Graham's strategy centers on conservative, low-risk purchases, identified by diligent research. His hard work paid off, earning him a gold medal in the circle of successful investors.

7/29/2016

Validea Hot List

The Facts about Corrections

Although the S&P 500 continues to hover near its recently established new record highs, investors appear to be becoming increasingly concerned regarding the potential for another correction, as indicated by recent exchange traded fund flows. However, is adopting a more conservative strategy a wise move? In this week's newsletter, we discuss this topic, citing market wisdom from Peter Lynch and Warren Buffet gurus, as well as top fund manager, Bill Nygren. We also rebalance the portfolio, adding five new stocks to the Hot List, including a direct-selling and e-commerce company as well as a manufacturer of steel wire reinforcing products.

7/15/2016

Validea Hot List

What Brexit Sell-Off

The market has recovered strongly since last month's Brexit vote, with the S&P 500 marching to new record highs. And, the Validea Hot List Portfolio has not been left behind. In fact, the portfolio has outperformed the broad market since the last publication of the Hot List Newsletter. In addition to an update on performance of the Hot List Portfolio, in this week's newsletter, we profile James O'Shaughnessy, a true quant whose disciplined approach to the market has served him very well over the years.

7/1/2016

Validea Hot List

The Brit Split

Macroeconomic events like Brexit matter. But what matters is not how they impact stocks in the short term, or what pundits predict might happen next in the process. What matters is how these events impact -- or don't impact -- the businesses of the companies in which you invest. In this week's newsletter, we examine what Brexit really means for your portfolio. We also rebalance the portfolio, adding five new stocks to the Hot List, including a mobile home maker and a geothermal utility.

6/17/2016

Validea Hot List

Go Your Own Way

Ignoring the crowd is often the right thing to do. That's true in life, and it's certainly true in the investing world, where many of history's most successful investors have demonstrated the ability to think and act with great independence. John Neff, who compiled one of the greatest track records ever while managing the Windsor fund for three decades, understood that notion quite well. In this week's newsletter, we take a look at Neff's advice on not following the crowd. We also look at some of the economic issues hanging over the market, including interest rates and the "Brexit."

6/3/2016

Validea Hot List

The "Hurry Up And Kiss Me" Market

The financial crisis and Great Recession were incredibly painful events for investors, the financial equivalent of going in for a good night kiss and having your date slap you in the face Because of that, many investors have spent the last several years sitting on the sidelines, not wanting to get hurt again. Seven years of rising stocks and a steadily improving economy haven't been enough to make them feel safe enough to dive back into the market. In this week's newsletter, we talk about how the market's year-plus pause has given those investors a chance to make their move -- and why that chance won't last forever.

5/20/2016

Validea Hot List

Profiting From "The Glitch"

Most investors don't have the patience to deal with problems. They are gung ho on a company and its shares until the water gets choppy. Then, unable to deal with some short-term turbulence in business performance and/or stock performance, they jump ship. In his classic book Super Stocks, Kenneth Fisher talked about how disciplined investors can profit from those impatient short-term thinkers. In this week's issue, we look at Fisher's concept of "The Glitch", and how short-term problems for companies can create opportunities for investors -- which appears to be what Warren Buffett and Berkshire Hathaway are seeing right now with Apple.

5/6/2016

Validea Hot List

Looking for Pockets of Value

Stocks have rebounded sharply off their February lows. What has that meant for equity valuations? In this week's newsletter, we look at how the market stacks up against a myriad of valuation metrics. We also look at how smaller stocks currently look valuation-wise compared to larger stocks, which leads to some surprising findings that are impacting the Hot List portfolio. Finally, we look at one factor that appears to be having a major impact on valuations of different segments of the market: the incredible rise in popularity of index funds.

4/22/2016

Validea Hot List

The Dangers of "Penultimate Preparedness"

In this week's newsletter, we examine mutual fund legend Peter Lynch's concept of "penultimate preparedness" -- people's tendency to plan for a repeat of a crisis that is unlikely to repeat. We examine how this notion played out after the 2008-09 financial crisis and Great Recession, and how many investors suffered because of it. We also take a look at some of the Hot List's holdings, including one stock that is up more than 20% since our last newsletter two weeks ago.