Value Quadrant July 2026 Update - Interesting Changes...

Good day fellow investors. Let's go through our value investing risk and reward quadrant. For those who don't know the quadrant. So I'm trying to compare risk and reward when it comes to investing. We have on the x axis reward from low to high and risk on the yaxis from low to high risk below. What is here is more of a sell and we go towards the upper right quadrant for buys. And there you have my research platform where you have the premium version of it. How does this work? This is a great comment, recent comment on my January 2025 value quadrant update. And when you look at the risk and reward, it develops over time. And here is my January quadrant video. And you can see here the risk and reward the buys you can see Archer Daniel Midland Nutrian Rubies Samsung Google was there and Petro Brass and also my research platform. So when price and fundamentals for a longterm return align you can see them in the upper right part of the quadrant. Let's see if now something goes there. Last update was 25 May. A lot of new stocks have been added and then we can discuss the risks and reward. So 25 May now becomes 10 July. Let's start with this side of the investment, the high risk, lowreward. And there we have the pinnacle of this market, SpaceX. And SpaceX just the mere fact that it's still alive at two trillion market capitalization explains this market. We are in a gambling environment. Everyone is looking for the stock to go up. Elon Musk promises life on Mars, things like that. Even if it's physically not possible, houses on Mars, you can't afford one in Michigan or wherever you live, Germany. After the six-month lockup period passes, all the owners that played that game earlier will start selling and you are in big trouble. So, good luck with SpaceX. Let's discuss something a little bit less exuberant, the S&P 500. The thing is that the market just keeps going up 10 15% per year. Looks great. Sven, whatever happens, the market just keeps going up. That is because of the passive bid. If the passive bid keeps on pumping the market higher, the market will keep going higher. However, the fundamentals, the dividend yield is terrible, the earnings are in a bubble. We have seen that with Google that we'll also discuss. Everything is inflated. If the trillion in buybacks weaken, people get fired. less inflows, passive mindless inflows into the market that push stocks higher because of the inelastic market situation because 2 trillion in the market capitalization is 10 trillion up and that explains perfectly the last 15 years the market is 6x. However, you have to understand that you are buying now something that is six times higher than it was here. Earnings didn't do that well. Also just look at market weights. Now passive investment just pushes money into that 64% is the US and if it reverts just to the normal and earnings keep on growing in everything over the next 10 years you are still in a negative return. So I have put the S&P 500 at likely 1% zero or real negative return over the next 10 years. Now, bonds, if I look at 10-year bonds, 3, four, 5%, the yields are a little bit higher now. But compare those yields with inflation and you are still getting a zero real return. However, when it comes to these bonds, if you get 4.5% 5% for the longer term bonds, inflation, if it averages 3%, you're still getting 2% real return. Compare that to the 1% or zero return for the S&P 500. This is better. I'm looking at from a long-term value investing perspective. So, that's how it's positioned on the quadrant. But if you're starting to think about income life now, it's not a bad time to think about it. Then we have Nike. The great have fallen here. The dividend now is 3.82%. They will likely get some growth. So I have pushed them from a 3 4% return to a four 5% less risky return because I think somebody will buy them out or things like that over the next 10 years things will change. So we are adjusting for that price decline and perhaps a bottom here any kind of improvement any kind of billion added to profits this stock will go higher. It looks terrible, but the best returns are made when things look terrible. Still, 3% dividend P ratio of 20 for what it was and what it represents. Perhaps it doesn't look that bad. We might discuss it in a video in a future. Next company, we have Pepsi. We discussed it in a recent video. All the links to the most recent video analysis of all the stocks in the quadrant will be in the link in description below. Also check I don't know interactive brokers for a cheap global broker if you want to look for global value and my research platform for my portfolio. My portfolio is I think expected 15% long-term fundamental return if you're interested on my research platform. Going back to Pepsi dividend, I don't see that grow. There is a lot of branded pressures as we discussed in the video. Schwab dividend ETF has done well despite the increase in interest rates going okay. But I think that as they are going for those higher dividends going around sectors consumer stamples, healthcare, energy, industrial than others, I don't think that there is much more than standard growth over time. Yes, they did grow the dividend 7% over the last 10 years, but there was no recessions. There was nothing. So, I'll stick to a fair assumption that you can get 5% long-term return there. Nothing crazy. Likely some adjustments for inflation also perhaps a little bit more. So less risky than the 10-year Treasury. I think ISML we discussed it a few times in the past. Now the stock is 5X from where we discussed it here. It was lower price better by ISML 568. Now it is a 3x on an AI bubble. their earnings are on the upper side of their projections. But when you think about it, they said 2030 60 billion in revenues. Even if it is 30 billion in profits, that's still 20. A P ratio of 20 in a few years, assuming perfection, execution and AI bubble continuing for me now too much risk. So I have moved it from here to a lower return. This is now crazy expensive. Next stock Google. We have discussed it in an intrinsic value and also how as the stock price went up as the AI bubble is evolving things are getting more exuberant. However, if we go to our free downloadable intrinsic value template on my free course, you can see here Google I have it at five six% long-term return. The P ratio is not 27 as we discussed, it's 40. Depends on the growth going forward, but I am pushing it from here to more risky, more in the AI bubble because the price simply went up. Next stock, BHP. The price is up. Iron ore prices are not up that much. These cyclicals have to be bought in a recession. So for now I'm leaving it here. Commodities are good, profits are good, everything looks good. But do you remember when we had this cyclical food cyclical here last year and a half ago when BHP comes here and that's the time to buy another cyclical we were discussing it when the dividend yield was 5% now it's 3% to me that's not crazy but this is very interesting tighter fertilizer markets and buybacks will support higher future earnings multiple so now the market is gambling on higher future multiples not absolute returns but relative returns same on Archer Daniel Midlands dividend is 2.59% so I am lowering the expected returns there and increasing the risk Verizon is next Verizon is an interest rate play now the dividend is again getting juicy 6% % far from the 5% of the 2022 still very very interesting the guidance is positive growth on all places so as the price is going lower if I'm focused on a long-term real return Verizon is at a 7% medium risk return we discussed calm foods you can check the full analysis as I already said in the links in description below it all depends on egg prices are lower likely some aven flu coming on and that's why the stock is going higher. I'll leave it where it is. Greg's UK company P ratio of 12 growth dividend 4.57% these are already some real investments. If you get 4%, if you add a few percentage of growth on inflation, that's already a 10% return there. 7 8 9 10%. Perhaps I should move it a little bit, but we'll leave that for next time. Here [snorts] next one. There is Amazon. Stock is going up. Everything looks good. If we look at our valuation, 67 expected long-term return. If we look at the scenario for 10% return, we have 15 and 10% growth rates expected for the next decade. P ratio of 20. If they grow faster, have a P ratio of 25, we are closer to intrinsic value, but not that. And for a margin of safety, if the growth rate declines just to 6%, P ratio gets to 15, then we are at uh 66% down. So too risky for my opinion or let's say a medium likely return going there. Still better than the S&P 500 I feel. Now we have Ryioneer. It's going down. The dividend yield is there. But if AI is great, everything gets more productive, more houses, bigger houses, robots building houses, this should do well. So there, this also shows the discrepancy between reality and AI. Is AI really going to help us or it's just a bubble? If you want to own land, if you want to own timber, check the full video and see how it fits you. It is interesting especially if you take a strategic approach to it. Then we have Birkshshire. The stock didn't do much over the last year and a half but it's also exuberantly priced for its quality. Price is key. If I look at 6% growth rates terminal multiple of 17, the average is between 10 and 20 for Birkshshire 25. Then yes, we are closer to the current one trillion market cap. This is in billions here. But if we go to a margin of safety, we can add the cash here for a margin of safety. We are still at 600 billion something like that for a proper valuation of Birkshshire. So that's 40% down. Thus risky from an investment perspective from a price perspective likely a good lowrisk return over the next 10 to 20 years you will get your 6% that's great for the certainty it offers China internet ETF this is interesting it's unloved but companies Tensent Alibaba PDD all things that are hit hard from the situation. Now, we discussed this in a few videos. And look also at this 13,000 views, 11,000 views signal low interest from people. Low interest, low sentiment, negative sentiment. This might be the time to consider this. So, I'm pushing it a little bit higher on the return. The lower the price, higher return and lower risk. Then we just recently discussed restaurant brands. You can check that video and other Accenture we discussed have put them here as starting following their will adjust over time. Meta also we just recently discussed it video link below. Then we have some more growth stocks older things. Aden price is weakening still but it will all depend on next earnings. It is a cheap growth stock but will depend on growth. HPQ, we said this crash is a buy. Here you have it. And the stock is higher. It boomed in some AI crazy bubble crashed and now it's going high again. But the P ratio is there. The dividend is there. The buybacks are there. And HPQ is HPQ. So if you bought here, now is the time to sell what you bought here. Let's say Domino's Pizza dividend 6% P ratio 12 potential inflationary growth. So you again there at the 9 10% structuring portfolio similar with Nomad Foods 6% dividend buybacks. If the target management discussion hits in the second part of the year improving prices this will go even higher. We discussed Microsoft recently and they're also much better pricing compared to many others for Microsoft. But keep in mind it is on exuberant growth rates going forward. If I lower the growth rate for margin of safety, lower the PE, the downside is still 60 70%. Marcado Libre Ferf Ferf is still change CEO market is on a wait and see and it will all depend if they can turn to growth in the next few quarters and over the next few years. We're looking at a P ratio three four by 2028. If not perhaps it will be a P ratio of 10 which is still let's say a good return. So I own this as a starting position in my diversified portfolio. Mercado Libre just ticking up a little bit. It will depend on the growth going forward as we discussed in the analysis for now. Looks good bottoming out. So another interesting situation to follow. Of course you can check everything on my research platform. There is my personal portfolio where I personally invest my money. No strategies, nothing. just as it goes model portfolio that has been there since 2018 15% per year something like that on value investing fundamentals now five six positions and that's how I try to keep it the diversified will be developed over the next year the plan is to have 20 30 positions for of course profit but also learning and I'll try to fit some of these into a YouTube portfolio so that I show more of what I do and that I buy the Samsungs and things like that when I feel those are uh buy as I did a year and a half ago. Check it out. It's very interesting. I have one remarkable buy for the current situation and that's I think would add value to most portfolios. We'll do the bets part in a few days. Let me know what you think in your comments. Check my research platform and I'll see you in the next