Value Investment Club – Membership Program
Value investing in the simplest of terms means to buy low and sell high. Value investing is defined as a systematic process of buying high quality stock at an undervalued market price quantified by intrinsic value and justified via financial analysis; then selling the stock in a timely manner upon market price recovery.
There are four key principles used with value investing. Each is required. They are:
- Risk Reduction – Buy only high quality stocks;
- Intrinsic Value – The underlying assets and operations are of good quality and performance and there is a core value for the security;
- Financial Analysis – Use core financial information, business ratios and key performance indicators to create a high level of confidence that recovery is just a matter of time;
- Patience – Allow time to work for the investor.
For those of you interested in an audio introduction, just click on the YouTube video created on the right.
When you join, you participate in two separate programs. The primary program is educational in nature and teaches the member about value investing and how to quantify intrinsic value and the corresponding buy and sell points for securities. This is done over a course of a hundred plus lessons; the idea is to give you long-term confidence with your trades. It is a self-paced program. There is no need to rush through the lessons. Although it appears quite extensive with 100 plus lessons, fear not, you still receive information about this site’s Value Investment Fund’s activity.
The second program is club membership in the existing Value Investment Fund. Here, you receive all the models and activity that occurs in the Club. The Value Investment Fund has eight pools (you learn about POOLS during initial phase of education) of similar companies:
- Real Estate Investment Trusts
- Fast-Food Restaurants
- Insurance (Property and Casualty)
- Military Contractors
As an example, in the fast-food pool, the companies monitored include McDonalds, Wendy’s, Dominos, Starbucks, Jack in the Box, Chipotle and Shake Shack. There is a buy/sell decision model that you have access to which is updated regularly to reflect the annual changes with intrinsic value and the corresponding buy/sell points.
Any activity in the Fund is posted as member-only articles along with the underlying decisions and the corresponding explanations. As a member, you may use the information for your own self-directed fund or just watch this site’s Fund as it grows and changes.
To the left is the most recent two and three-quarter years’ evaluation. This site’s investment fund has outperformed all major indices from large across the board fund groups (S&P 500 and DOW Jones Industrial Average) to indices focused on growth (Invesco QQQ and Vanguard Growth). Average annual returns exceed 26%. The only investment style that outperforms value investing is ‘LUCK‘.
Membership starts with learning about value investing and how it works. There are eighteen lessons for Phase One of the program. The lessons are available after you log in. This is a self-pace program.
While learning, the member receives all notices, alerts, activity reports, articles and white papers about each pool and the individual potential investments. You are kept apprised of all Fund activities in order to use this information to your benefit as you deem fit.
In Phase Two of the program, an additional 100 lessons explain how to develop financial metrics to identify opportunities. In this phase, a pool is developed from step one all the way through to the final decision model. This particular phase focuses on hotels. Each lesson builds on the prior set and develops your understanding of how financial information is evaluated. This allows you to create your own investment pool in parallel to the hotels pool. Most members spend about two to three hours a week during the first two phases of membership. Once a full understanding is acquired, members begin to create and share their pool of investment knowledge with others; participation time drops to about one to two hours per week as they actively trade in the market.
The final phase is referred to as sophistication. It teaches the member about some auxiliary tools an investor uses to marginally increase the fund’s overall return. For a more detail understanding of all three phases, just scroll down a little further for more information.
This site’s Value Investment Fund’s Annual Returns:
. 2020 – 34.41% This Fund has averaged a 24.55% annual return since inception.
. 2021 – 41.08%
Year-to-Date Thru 08/31/2022 – 4.77% (see chart below)
Notice how this site’s Fund had a positive return while all major indices had losses? This is directly attributable to risk reduction which is one of the core four principles taught in Phase I of this program.
Membership Program Phase One – Introduction, Terminology and Conception
When you join as a member of the club, you progress through three phases. The first phase is essentially the education aspect of the program. During this phase, you will learn about value investing and how systematic buying and selling accumulates wealth. Most members take about four to six months to complete this part of the program. It includes:
- A curriculum of lessons introducing value investing and the terminology commonly found with this type of investing.
- Tutorials whereby instruction and illustrations are provided to give you a well-rounded perspective of how value investing works and creates wealth.
- An initial set of spreadsheets, templates and resource venues are introduced prior to Phase Two of the program.
For additional information, please review the syllabus: Phase One – Syllabus
Membership Program Phase Two – Financial Analysis
Phase Two introduces the member to the concept of pools and why pools of similar investments act as the heart of value investing. The goal is take the member to the next level of understanding financial elements of business. This part of the program covers:
- Understanding financial statements; how to read and interpret the information.
- Learn how business ratios act as an equalizer among similar companies and how to properly compare results.
- The AH-HAH moment starts now when you develop a key understanding of intrinsic value and how to measure intrinsic value.
- Finally, learn how to develop more in-depth comparative models and set the buy/sell trigger points for your pool of stocks.
This phase takes about six to twelve months for most members to understand and comprehend the fundamentals.
Membership Program Phase Three – Sophistication
During this phase, the member begins to actively trade in the market with confidence. Some members create their own pool and share their information with the club. Most members use the existing Investment Fund pools and the metrics reported to actively trade. During this phase, the member is introduced to more sophisticated aspects of value investing including:
- Using different risk reduction methods to improve their overall investment portfolio;
- Gain an elevated understanding of how options can leverage an investment portfolio’s return;
- Learn how to read notes to financial statements and tie the information to their own developed metrics;
- Become a mentor for new members and assist them in developing a pool of similar companies.
Membership does not require you to develop a pool, but it is highly encouraged. Sharing your knowledge with others broadens your own awareness and increases your confidence. All members use similar metrics to develop their own investment pool. Furthermore, you are encouraged to review existing pools and comment about them so all members are aware of the respective advantages and risks associated with a particular pool.
The end result is access to many stocks that are vetted and meet certain standards for value investors to select from for buys and sells. With this information, value investing will result in 30% plus average annual returns. Wealth accumulation is now just a matter of time.
When you join the club, the first six months are dedicated to learning about value investing. Your initial e-mail includes the first lesson. From there, it is self-paced. You simply log in and continue your lessons. You get follow-up e-mails with links to tutorials, articles, and other supporting resources. Each week, you’ll receive an e-mail with any activity actions during the prior week along with monthly updates about this site’s Value Investment Fund. You may mimic buy/sell orders the existing investment portfolio exercises. If you decide to create your own pool of investments, you are encouraged to have the pool reviewed by the instructor. Once validated, you may include your pool in the investment club’s portfolio. From here, your pool’s information is shared with all members and you provide weekly updates related to your pool of investments.
Long-term wealth accumulation is a function of knowledge and confidence. When all members exercise similar standards of care, it allows all members to acheive success.
Join today, fill out the application below and begin by first learning about value investing.
Upon application and payment, the instructor will contact you via e-mail and forward, within 48 hours, the first package which includes:
- Syllabus of Courses and Tutorials
- Value Investing – Reasonable Expectations (Lesson 1)
- E-Book: Value Investing with Business Ratios
- Suggestions/Resources and a Personal Message from the Instructor
The Legal Disclaimer
Members receive weekly updates on trades made with the example Investment Fund. This serves a two-fold purpose. Members may mimic the activity the Investment Fund makes for their own personal gain and as a training tool. At no time is a member entitled to any financial ownership right of this site’s fund. The site facilitator is not a registered broker nor agent and therefore cannot invest on behalf of members. This fund is owned by this site and is not a shared pool. Your membership only entitles you to all the information about this Investment Fund. Your membership payment provides three benefits:
- Educational information about value investing as explained above;
- Access to the existing pools of the Investment Fund and the particular trades along with financial status of the Fund;
- Weekly updates, articles, posts, templates, and other resources to assist the member with the development of their own pool to use in conjunction with the Investment Fund’s pools.
Finally, remember investing is not for the faint of heart; there is RISK involved. No single individual has control over the market, the government or consumer behavior. The market can and WILL have periods of decline. Sometimes these down periods can endure for several years. Thus, only risk that which you can lose financially or set aside for long periods of time. No investment program is a guarantee of success. Value investing’s number one principle is to reduce risk in the investment by purchasing stock near or for less than intrinsic value. This single principle has more focus in this series than the other three principles combined.