When I go through the comments below YouTube videos where I appeared, the feedback is overall positive or neutral if the commenter has a different opinion. Of course that’s perfectly fine, everyone shall express their views. Occasionally, I find comments where I am described as having a negative attitude, being bearish or overly pessimistic. While I don’t care on a personal level in the sense that I do not feel offended or take such comments personally, one such comment has led me to think about it a bit deeper – and write a Weekly about it! While it sounds contradictory at first sight, it simply fits into my investment and analysis approach.
Summary and key takeaways from today’s Weekly
– Today, I am writing a bit off-topic – why do I appear grumpy and pessimistic for some in videos?
– It sounds contradictory at first sight, but it is only a logical consequence that I must be rather negative about what is interesting for the retail crowd (the target group for such videos).
– My stock ideas for my members show that I am by no means overly pessimistic – I would call it rather very selective.
He must be short!
Does he hate stocks?
Why is he so bearish?
That sounds too pessimistic!
These are questions that surround me if I scroll through the comment section on YouTube videos where I was invited as a guest for a discussion. They don’t confuse me and don’t change who I am. Neither do I have sleepless nights nor am I starting to suddenly doubt myself.
One such comment, however, caught me at the right moment and made me want to write a Weekly about it after I thought a bit about it. At first glance, it sounds contradictory. I am analyzing stocks and seeking attractive opportunities, while at the same time I seem grumpy for some as I do not like or even entirely dislike most stocks in those discussions.
Am I negative or just realistic?
In fact, both do not rule out each other. They are even complementary and a consequence of my work as a stock picker and analyst.
This Weekly explains why.
If you’re looking for attractive, overlooked stock ideas the majority has a blind eye on, look no further. I am offering compelling non-mainstream cases in concise 12-page member-exclusive reports.
Want to outsmart the market? Get active now! Become a supporting paid-member and receive my best stock ideas (plus updates).
Join me and my members on our journey to beat the markets!
Update again next week
Saying “no” more often than “yes” – it’s just part of the game
On average these remarks do not compose the majority of comments.
I cannot give you a concrete number even, but there are always, depending on the amount of clicks the video has, up to a handful (or two) such remarks saying that my perspective or assessment on the discussed stocks is too negative. At least among those I come across.
A few examples that come to my mind spontaneously are:
- PepsiCo. (ISIN: US7134481081, Ticker: PEP)
- Berkshire Hathaway (ISIN: US0846701086, Ticker: BRK.A)
- LVMH (ISIN: FR0000121014, Ticker: MC)
- PayPal (ISIN: US70450Y1038, Ticker: PYPL)
- alcohol stocks like Brown-Forman (ISIN: US1156372096, Ticker: BF.B) or Pernod Ricard (ISIN: FR0000120693, Ticker: RI)
- the big tech stocks
- the diabetes or weight-loss drug stocks
My longer-time readers will instantly know that I am indeed not convinced of these stocks for various reasons – mostly it’s the valuation and risk / reward.
What they all have in common, though, is they have a big retail following.
Is this good or bad? Generally, I do not like too much spotlight. When a stock gets lots of attention and practically everyone and the barber of their neighbor’s mother is seeing great value and a once-in-lifetime buy-the-dip opportunity “for the long term” because a stock has fallen so and so much from its high – I cannot but to stay on the side line.
What everyone already knows (or thinks to know), is likely already priced in.
Not to mention that in many cases there’s no serious research behind such statements or assessments but rather relying on or referring to past performance, crowd-following or biases of all sorts. From a different perspective, I like to draw the parallel of a boat where everyone sits on the same side, creating the risk to capsize.
Of course this does not apply to all stocks and setups.
But painting with a broad brush, this applies to many cases.
One of the biggest reasons why exactly such stocks are picked for YouTube videos is they obviously catch attention and create clicks as many retail investors share the same pain. When I propose a smaller, more exciting setup, I have received the answer that this is not interesting enough, we need better-known names (in the sense of not enough clicks expected). But that’s for sure not always the case!
Well-known, big-in-the-media or just heavily sold-off stocks not seldom have their place in retail portfolios. Many bought at the high in euphoria because “nothing can go wrong”, the company has “strong brands” and / or the stock “will grow into its valuation” or (choose your wide-spread reason freely).
After a stock falls from its high, many assume its former top suddenly becomes the point of reference for its fair value (see here my Weekly discussing this topic).
On the other side, only a fraction of viewers are interested in lesser known gems. Imagine I came up with Vista Energy (ISIN: US92837L1098, Ticker: VIST) at the time of the publication of my report for my Premium PLUS members (see here) – which I obviously would not do to keep such a potential rocket exclusive.
Skepticism and disbelief are safe for me – and little clicks for the host.
I am sure that I would have heard comments like “oh, that’s too exotic and too risky”, “it’s a too small company, I better pick the proven ones”, “they don’t pay a dividend” or “a Mexican company operating in Argentina – forget it”.
But seeing the following explains why I am a fan of Vista Energy and not those ideas that mainstream retail investors want to get their tenth YouTube video about.
The chart shows the performance since my report for my Premium PLUS members came out about two years ago (see here). While the outperformance against the mainstream stocks is obvious, what is really interesting (for geeks like me) is that this happened during a period where the price of oil has FALLEN by 18%.
Of course, am I not too fond of the supermajor energy stocks or the other retail darling, Occidental Petroleum (ISIN: US6745991058, Ticker: OXY), when the main reason is “oh, because Buffett owns this stock” or something similar.
Until today, I have not received a plausible answer for why it would be better to buy into a bunch of losers when I can have a company:
- which is founder-led
- where management under-promises and over-delivers frequently
- that is focussed and follows a clear organic growth story, in this case paired with a major recovery of the Argentine economy and political landscape
- where additional drivers exist (abolishing price controls, catching up with higher international prices, export opportunities, etc.)
- which has a clean balance sheet
I am a stock picker, not a garbage hunter. Likewise, I am not a portfolio messy who allocates micro positions of every stock that comes across me only to feel broadly “diversified” and who is high-fiving his quarterly five-bucks dividend.
Another example: silver.
I wrote twice about silver (see here and here, my update is even until this day one of my most clicked articles ever) when the price was somewhere in the low 20s. Barely anyone cared, but those who cared were surprised that most silver miners weren’t able to even keep pace with the price of physical silver.
Miners ought to be safe levered bets on the respective mineral, I thought?
It makes a difference whether you buy just a known name or if you turn a few stones more to find a fundamentally strong company with competitive advantages and great management execution. Until today, I often see people not knowing that one has to look at production costs, remaining reserve life together with the replenishing potential, per share metrics (dilution!) as well as the balance sheet.
I could write ad nauseam about that. The following is only interesting for the masses after it has happened, not at the beginning. Silvercrest, which has been acquired in the meantime, first slumped due to a mix of disappointment after the release of an updated technical report and (from my view) a slightly ambitious valuation.
I published my report and in less than a year the stock was up by 85%, coming from a de-risked valuation level and offering one of the best silver mining setups at that time.
So why should I care about the pretend top names of the sector when they have inferior setups? In my updates for my members, I here or there showed that Silvercrest was outperforming its peers and of course spot silver.
In this regard, I recommend to read my Weekly about low production costs (see here), if you haven’t done already. It’s also good as a refresher.
I could name more examples.
But I think my arguments are clear. Thus, it is just a logical consequence that with my research I often come to the conclusion that for example an entire sector like consumer discreationaries or food and snacks is currently not interesting for me. I am leaving that for others to cheer.
What can be interesting for me is to choose the best or maybe the two best options instead of lying to myself and spreading over several at best mediocre bets. Not all stocks can be the best stocks. Only few are great if you do fundamental analyses and obviously the majority must be less attractive, for whatever (often fundamental) reason that might be.
After having thought about it, this is likely the reason why I appear somewhat pessimistic in the interviews I am doing.
I am just selective and on the hunt for the best options and under-covered ideas.
My best ideas are reserved for my paid-members, while I in most cases discuss ideas publicly that are of less or even no interest for us. Occasionally, I drop a name like Vista Energy, but the best ideas with great setups, and at the right time, are member-exclusive.
Conclusion
Today, I am writing a bit off-topic – why do I appear grumpy and pessimistic for some in videos?
It sounds contradictory at first sight, but it is only a logical consequence that I must be rather negative about what is interesting for the retail crowd (the target group for such videos).
My stock ideas for my members show that I am by no means overly pessimistic – I would call it rather very selective.
By becoming a Premium or Premium PLUS Member, you get instant access to all my already published research reports as well as several updates.
Likewise, you qualify for eight, respectively four more exclusive reports with my best investment ideas plus updates on the featured businesses over the next twelve months.