Pendultus Playbook

Your Pendultus Premium Stock Newsletter Guide and FAQ

Welcome,

Congratulations on becoming a valued member of the Pendultus Premium Stock Newsletter. Pendultus Premium is a value-orientated stock newsletter. Our overall mission is to provide you with stock ideas that beat the Wilshire 5000 and S&P 500, without taking on excessive market risk.

Consider this stock newsletter akin to your personal stock tip sheet. Each month you’ll receive a list of highlighted stocks that we expect to outperform the market over the ensuing 12 to 36 months, if not significantly longer.

Each highlighted stock in the newsletter has passed our proprietary valuation algorithm and an extensive manual checklist by an analyst. On average, you can expect 15-20 highlighted stocks to be found in each issue. The number of stocks will vary month to month depending on market valuations, which is something we have no control over.

For each new stock listed in Pendultus Premium, we’ll provide you with our investment thesis, projected valuations, important news updates and more often than not, a brief technical overview. For additional color, we encourage you to read analysts’ reports for each stock which are available online or through your broker. Just keep in mind that their opinion about a stock may differ from ours because we’re highlighting under-appreciated stocks.

While you will find some well-known names among our highlighted stocks, the biggest edge comes from the small and mid-cap stocks we highlight. These stocks typically provide the best long-term returns because they have less institutional coverage, most retail investors aren’t familiar with them and they have better long-term growth prospects.

Another useful idea that many of our readers use, is to combine our value-orientated stock newsletter with a highly rated growth-orientated stock newsletter. This spreads your risk and lets you take advantage of any market condition.

Important Reminder: Please add members@valueinvesta.com to your safe list for your email provider. If you’re unsure how to do this, do a quick search on the web for your preferred email provider and you’ll find many great short tutorials.

FAQ-Frequently Asked Questions

When is each issue delivered to the member’s area?

Each issue is delivered the last Sunday or Monday of the month (typically the last Sunday). You’ll receive an email notification from members@valueinvesta.com when the newest issue becomes available.

How come I only see the most recent newsletter?

Reading our newsletter on mobile devices is the preferred method for the vast majority of our members. Therefore, we find it easier to update the current issue each month as opposed to creating separate pages. We keep a separate list of our previous highlighted stocks that are provided for your review.

How are the returns calculated?

We average the list of active stock returns in aggregate each month. Each stock has an equal weighting in relation to all the highlighted stocks at that time. For example, if there are 20 active stocks, each stock would have a 5% weighting.

Remember that the most important numbers to focus on are the annualized returns in relation to the risk you’re taking.

Can I expect to achieve the same returns that you advertise?

Returns will depend on what time of day you place your buy and sell orders, the bid/ask price and commissions. Everyone’s returns will be slightly different based on their timing, risk tolerance and investing styles. Past performance is not an indication of future performance. It may be better; it may be worse.

Keep in mind that our value-orientated investing style will lag the stock market averages over periods of time. This is inevitable for investors following a specific investing style.

If you look at Warren Buffett’s track record, you’ll find that he underperformed the broad stock index about once every three years. He’s had 4 years where he underperformed the market by 10% or more for an entire year. As such, it’s important that you pick a newsletter with an investing style that fits your personality.

How do you suggest new readers start?

The best way to get started is to focus on the most recently added stocks along with those that are the most undervalued according to our buy below prices. As a value-orientated newsletter, the higher the stock price goes above the original issue price, the worse the risk to reward ratio becomes (unless there are material changes to support an additional price move).
If a company has the necessary economic tailwinds to support further growth and our financial models show significant upside potential compared to the market, we will certainly increase our target price and notify our subscribers. We will not, however, increase our buy price trying to eke out that last 5-10% of gains.

Be patient. There’s no reason to jump in headfirst and become fully invested in all our stocks. Build up your positions over time based on the opportunities that look best to you.

When do you recommend that I buy or sell a stock?

It is up to the individual and their accredited financial advisor to decide when to buy or sell a stock. There are simply too many factors involved in financial planning to make blanket recommendations for each investor.

Our job is to focus on highlighting stocks that have a high probability, based upon our evaluation models and checklists, of outperforming the market going forward. It’s worked brilliantly so far and is the reason subscribers stay with us for the long-term.

They don’t renew their subscription year over year for a recap of what’s already in the news. Our subscribers want a list of stocks that will outperform the market long-term without taking on unnecessary risk.

How much should I invest in each stock?

We take the simple approach of investing an equal percentage in each of our highlighted stocks based on the number of stocks we hold. For example, if we held 19 stocks and were adding the 20th, we would raise funds from other stocks and initiate a 5% position in the new stock (1/20 = 5%.)

The reasoning is quite simple. We don’t know ahead of time which will be our biggest winners, and which will lag the markets. If it was that easy, everyone would just eliminate their losers.

In the end, it’s up to your comfort level and the advice of your financial advisor. You must remember that even the most successful investors of all time have losing stocks. Therefore, it’s important to never put too much money into any one stock.

We would advise you against holding more than 5% in any one stock unless you’re very knowledgeable about the stock and can assume the risk of larger portfolio swings. Due to the unpredictable nature of people and the economy, our highlighted stocks will have negative surprises.

Some of our biggest winners started off with negative returns of over 15% before turning to the upside. We try our best to avoid the downturns, but it does occasionally happen. If you have too much invested in a stock that was down 15%, you would likely have difficulty sleeping at night and sell the position, losing out on any market-beating returns going forward.

We aim for 60-70% winning stocks compared to market averages. This has been a high enough bar to comfortably outperform the market.

An excellent approach we find many readers take is to invest a percentage of their monies in individual stocks and the rest in a basket of index funds or a target retirement date account for added diversification.

As previously mentioned, another useful idea that many of our readers use is to combine our value-orientated stock newsletter with a highly rated growth-orientated stock newsletter. This spreads your risk and lets you take advantage of any market condition.

Are you a certified financial planner or investment advisor?

Some financial publication companies use low-cost newsletters as an advertising vehicle for their financial planning business or as a loss leader for higher-priced investment newsletters. We do not offer financial planning or high-end investing newsletters to the public. Therefore, we must keep our newsletter price high enough to cover expenses and make a little profit. The good news is that it means we’re not holding anything back; you get our best ideas! (at an incredible bargain considering our performance surpasses that of newsletters costing $995 or more annually)

The Pendultus Premium Stock Newsletter is for informational and learning purposes only. We simply provide a list of stocks that we believe have the potential to outperform the market averages. It’s worked well so far. You should always consult with a certified financial advisor before deciding to buy or sell stocks contained in our newsletters.

Why don’t you send inter-issue commentaries?

Because we’re not short term swing traders. We invest in a stock, expecting to hold it for 12 months or longer to take advantage of longer-term price moves and lesson capital gains. Therefore, there’s no reason to take any action unless there’s a significant material change that impacts our long-term view of the stock. In those situations, we’ll send an email alert with any immediate changes to our valuation models.

Over the years we’ve come to appreciate this more relaxed approach to investing and it’s helped our results. We hope you do also. Take the time to enjoy life, spend it with family and friends. Focus on long-term performance. Don’t sweat the daily fluctuations or get caught up in the noise. That’s what the trading firms and news sites want you to do to make money for them.

Who do I contact for further questions or suggestions on how to improve the newsletter?

If you have further questions or recommendations, please send them to members@valueinvesta.com