On the latest Marketplace Roundtable podcast, David Trainer, of Value Investing 2.0, sits down with Seeking Alpha's Jonathan Liss to walk listeners through his comprehensive stock and equity fund valuation system. The system, which David pioneered at New Constructs, LLC, is rooted in a painstaking process of forensic analysis and correcting financial reporting data, via machine learning and artificial intelligence. The wide-ranging conversation that follows quickly moves beyond an explanation of David's valuation models and tries to answer deeper questions about proper valuation techniques in a 'permanent' low yield environment.
Topics covered
2:30 - David explains how he ended up building out his proprietary fundamental stock and fund rating models 10:00 - David drills down into how his valuation models differ from standard stock valuation tools 14:30 - Is there still a place for 'product narratives' in successful stock picking? The case of Amazon.com (AMZN) 20:00 - Are we permanently trapped in a low rate environment? And if so, what does it say about the future expected returns of equities as an asset class? 27:00 - Will low rates continue to cause P/E multiple expansion, fundamentals be damned? Disney (DIS) vs. Netflix (NFLX) 31:00 - How do David's models differ for equity funds vs. stocks? 35:30 - A drill-down into current sector valuations: Telecom equipment vs. Tech stocks 39:15 - Specific stock recommendations based on David's model: Regal Beloit Corporation (RBC) 45:15 - Which major index and accompanying ETFs currently offer the best valuation: (DIA), (QQQ) or (SPY)?