As contrarian value investors, our mandate at HCM Value is straightforward: accumulate durable, mispriced assets with real intrinsic worth. But in an era of chronic monetary expansion, the deepest valuation challenge isn’t in equities, real estate, or commodities. It’s in the measuring stick itself: the U.S. dollar. From Bretton Woods to Fiat Decay When the …
Continue reading “The Dollar’s 96% Vanishing Act: 1971–2025”
Hoover Capital Management · 9.16.2025 Executive summary BluSky AI, Inc. (BSAI)—formerly Inception Mining—has posted a parabolic year-to-date advance following a rapid pivot to “AI.” That price action is a classic late-cycle tell: narrative first, fundamentals later. At the same time, industry-wide AI-infrastructure capex has entered a super-cycle, pulling forward years of spend into today’s budgets. …
The Enduring Case for Value Value investing has a record of success that stretches back nearly a century. From Graham and Dodd’s work in the 1930s to the Fama-French research in the 1990s, the data are consistent: systematically buying undervalued securities delivers superior long-term returns. Yet, despite the evidence, most investors either avoid value …
Executive Summary After a decade dominated by capital-gain chasing and massive share buybacks, dividend yields have quietly slipped from the spotlight. Yet, history shows that dividend yields, not just price appreciation, have often carried the heaviest load in delivering long-term returns on equity. As the cost of capital resets higher, global demographics age, and regulatory …
Continue reading “The Silent Risk: Dividend Droughts and Why Yield Matters Again”
Everyone knows the timeless investing rules: buy low, sell high, diversify, and stick to the fundamentals. But even with this knowledge, the majority of investors fail. The culprit? Ourselves. Neuroscience tells us that the very brain that brings us those capabilities can wreak havoc on our portfolios via emotional reflexes and cognitive biases. Neural wiring, …
Continue reading “Why Your Brain Hates Contrarian Investing (And Why You Should Embrace It)”
NVIDIA’s Valuation and the DeepSeek Disruption Before this past weekend, we had already been analyzing NVIDIA’s (NVDA) valuation, applying the Mauboussin expectations framework to understand what growth was needed to justify its massive $3.6 trillion market cap. Is Nvidia Overvalued? What we found was eye-opening: NVIDIA’s stock price implied that the company would grow its …
Continue reading “Is Nvidia Overvalued? A Value Investor’s Perspective”
Introduction to International Diversification In the ever-evolving landscape of global investing, the allure of the U.S. stock market has been undeniable, driven partly by the meteoric rise of large-cap technology stocks. These stocks have commanded eye-watering valuations, prompting investors to increase their exposure to U.S. equities significantly. While this strategy has borne fruit in recent …
Continue reading “The Imperative of International Diversification in a High-Valuation U.S. Market”
Introduction In an era marked by rapid changes in economic conditions and monetary policies, understanding the true strength of the stock market has become more complex. Traditional metrics often obscure the underlying economic realities, making it necessary to delve deeper into value and performance. Analyzing the S&P 500 in terms of a timeless asset like …
Continue reading “The Hidden Truth: Why the S&P 500’s Record Highs Might Be Deceiving You”
Introduction In the evolving landscape of artificial intelligence (AI), Nvidia has emerged as a pivotal player, capturing the attention of investors worldwide. As of June 11, 2024, Nvidia’s year-to-date total return constitutes a staggering 44% of the S&P 500’s total return. This remarkable performance has continued to push Nvidia’s valuation higher, now at 42x …
Continue reading “Nvidia’s Market Impact: Trees Don’t Grow to the Sky”
At Hoover Capital Management (HCM), we’ve always championed the principles of value investing. Our commitment is rooted in the belief that focusing on fundamentally strong companies with undervalued assets leads to sustainable long-term growth. This belief is further reinforced by a recent analysis of the French High Minus Low (HML) factor, which highlights the historical …
Continue reading “The Enduring Power of Value Investing: A 97-Year Retrospective”
A Return to Dominance: The Magnificent 7’s Influence in 2023 In 2023, the financial markets witnessed a striking phenomenon. The S&P 500 and MSCI ACWI reported robust returns of 26.2% and 22.2%, respectively, signaling a buoyant year for investors. However, these headline figures mask a deeper, more intricate narrative of market concentration and disparity. The …
Continue reading “Unveiling the Influence: The Magnificent 7 Shaping”
Introduction: As steadfast believers in value investing, Hoover Capital Management (HCM) has always been intrigued by the interplay between base rates and case rates in both the market and nature. Before delving deeper, let’s define these crucial terms: Base Rate: In investing, as in assessing natural phenomena, the base rate refers to the underlying frequency …
Continue reading “Value Investing’s Resilience: Sharks & Lightning Insights”
In the world of investing, there are few names as revered as Sir John Templeton. A pioneer of global investing and the founder of the Templeton Growth Fund, Templeton’s investment philosophy has stood the test of time, consistently delivering value to investors. His approach to investing, which emphasizes value and contrarian thinking, resonates strongly with …
Value investing, a strategy that involves buying securities that appear underpriced by some form of fundamental analysis, has historically shown to outperform other investment strategies for several reasons: Market inefficiencies: Despite efficient market theory, which states that all available information is already factored into a security’s price, markets can often misprice securities. This can be …
Continue reading “Value Investing: Exploring the Reasons Behind Its Historical Outperformance”
The Art of Value Investing: Unlocking Hidden Gems in the Stock Market Have you ever wondered how some investors seem to have a magic touch when it comes to picking winning stocks? They don’t rely on luck or gut feelings; instead, they follow a strategic approach called value investing. Value investing is a time-tested investment …
Neuroscience and Investing: Enhancing Global Value Strategy through Emotional Intelligence HCM believes it’s crucial to recognize the profound influence of ‘affect’ or emotional responses on investment decisions. Drawing lessons from the dot-com bubble, the FANMAG (Facebook, Amazon, Netflix, Microsoft, Apple, Google) era, and the most recent surge in AI-centric businesses, such as Nvidia, can provide …