One of the biggest problems of humanity is information overload.
Think about how we used to get information just 50 years ago. We had to deliberately search for them.
We had to engage in conversations, go to the library or bookshop to search relevant books or buy a newspaper.
The internet gave birth to niche forums, and we got search engines which allowed us to find blogs and articles.
Until social media arrived, it was a careful quest for information.
Social media turned it around. Instead of searching for information, we now get bombarded with news, ideas, opinions – from anyone around the world, nonstop 24/7.
With ChatGPT, we got a tool that not only bombarded us with human created information, we can now basically create our own information, endlessly.
The worst: People now flood the internet and social platforms with content they didn’t even write themselves.
What does this mean?
It is now easier and cheaper than ever to access information. Which is great!
But it is harder than ever to focus on what really matters to us.
The now endless stream of information siphons our energy, distracting us from the intentional paths we truly wish to pursue.
I think the best way to consume information consciously is to first have a clear picture of what we want to understand and know, and then to dedicate time for deep-reading and deep-writing.
That means, not only searching for quick information on what truly interests you – but choosing one subject to study, research, and then write your own essay on it.
Whether you publish that essay or not is irrelevant.
Merely writing it keeps your thinking-ability alive.
The important thing is to do it consciously.
Use AI only as a research partner – not a ghostwriter.
Pick what you want to master. Then dedicate time to actually master it – not only consume endless information on whatever the world decides is important now.
OpenAI released its new o3 models and numerous people argue that this is in fact Artificial General Intelligence (AGI) – in other words, an AI system that is on par with human intelligence. Even if o3 is not yet AGI, the emphasis now lies on “yet,” and – considering the exponential progression – we can expect AGI to arrive within months or maximum one to two years.
According to OpenAI, it only took 3 months to go from the o1 model to the o3 model. This is a 4x+ acceleration relative to previous progress. If this speed of AI advancement is maintained, it means that by the end of 2025 we will be as much ahead of o3 as o3 is ahead of GPT-3 (released in May 2020). And, after achieving AGI, the self-reinforcing feedback loop will only further accelerate exponential improvements of these AI systems.
But, most anti-intuitively, even after we have achieved AGI, it will for quite some time look as if nothing has happened. You won’t feel any change and your job and business will feel safe and untouchable. Big fallacy. We can expect that after AGI it will take many months of not 1-2 years for the real transformations to happen. Why? Because AGI in and of itself does not release value into the economy. It will be much more important to apply it. But as AGI becomes cheaper, agentic, and embedded into the world, we will see a transformation-explosion – replacing those businesses and jobs that are unprepared.
I thought a lot about the impact the announced – and soon to be released – o3 model, and the first AGI model are going to have.
To make it short: I am extremely confident that any skill or process that can be digitized will be. As a result, the majority of white-collar and skilled jobs are on track for massive disruption or elimination.
Furthermore, I think many experts and think tanks are fooling themselves by believing that humans will maintain “some edge” and work peacefully side-by-side with an AI system. I don’t think AGI will augment knowledge workers – i.e. anyone working with language, code, numbers, or any kind of specialized software – it will replace them!
So, if your job or business relies purely on standardized cognitive tasks, you are racing toward the cliff’s edge, and it is time to pivot now!
Let’s start with the worst. Businesses and jobs in which you should pivot immediately – or at least not enter as of today – include but are not limited to anything that involves sitting at a computer:
anything with data entry or data processing (run as fast as you can!)
anything that involves writing (copywriting, technical writing, editing, proofreading, translation)
most coding and web development
SAAS (won’t exist in a couple of years)
banking (disrupted squared: AGI + Blockchain)
accounting and auditing (won’t exist as a job in 5-10 years)
insurance (will be disrupted)
law (excluding high-stake litigation, negotiation, courtroom advocacy)
any generic design, music, and video creation (graphic design, stock photography, stock videos)
market and investment research and analysis (AI will take over 100%)
trading, both quantitative and qualitative (don’t exit but profit now, but expect to be disrupted within 5 years)
any middle-layer-management (project and product management)
medical diagnostics (will be 100% AI within 5 years)
most standardized professional / consulting services
However, I believe that in high-stakes domains (health, finance, governance), regulators and the public will demand a “human sign-off”. So if you are in accounting, auditing, law, or finance I’d recommend pivoting to a business model where the ability to anchor trust becomes a revenue source.
The question is, where should you pivot to or what business to start in 2025?
My First Principles of a Post-AGI Business Model
First, even as AI becomes infallible, human beings will still crave real, raw, direct trust relationships. People form bonds around shared experiences, especially offline ones. I believe a truly future-proof venture leverages these primal instincts that machines can never replicate at a deeply visceral level. Nevertheless, I believe it is a big mistake to assume that humans will “naturally” stick together just because we are the same species. AGI might quickly appear more reliable, less selfish than most human beings, and have emotional intelligence. So a business build upon the thesis of the “human advantage” must expertly harness and establish emotional ties, tribal belonging, and shared experiences – all intangible values that are far more delicate and complex than logic.
First Principle: Operate in the Physical World
If your product or service can be fully digitalized and delivered via the cloud, AGI can replicate it with near-zero marginal cost
Infuse strategic real-world constraints (logistics, location-specific interactions, physical limitations, direct relationships) that create friction and scarcity – where AI alone will struggle
Second Principle: Create Hyper Niche Human Experiences
The broader audience, the easier it is for AI to dominate. Instead, cultivate specialized groups and subcultures with strong in-person and highly personalized experiences.
Offer creative or spiritual elements that defy pure rational patterns and thus remain less formulaic
Third Principle: Emphasize Adaptive, Micro-Scale Partnerships
Align with small, local, or specialized stakeholders. Use alliances with artisan suppliers, local talents, subject-matter experts, and so on.
Avoid single points of failure; build a decentralized network that is hard for a single AI to replicate or disrupt
Fourth Principle: Embed Extreme Flexibility
Structured, hierarchical organizations are easily out-iterated by AI that can reorganize and optimize instantly
Cultivate fluid teams with quickly reconfigurable structures, use agile, project based collaboration that can pivot as soon AGI-based competition arises
Opportunity Vectors
With all of that in mind, there are niches that before looked unattractive, because less scalable, that today offer massive opportunities – let’s call them opportunity vectors.
The first opportunity vector I have already touched upon:
Trust and Validation Services: Humans verifying or certifying that a certain AI outcome is ethically or legally sound – while irrational, it is exactly what humans will insist on, particularly where liability is high (medicine, finance, law, infrastructure)
Frontier Sectors with Regulatory and Ethical Friction: Think of markets where AI will accelerate R&D but human oversight, relationship management, and accountability remain essential: genetic engineering, biotech, advanced materials, quantum computing, etc.
The second opportunity vector focuses on the human edge:
Experience & Community: Live festivals, immersive events, niche retreats, or spiritual explorations – basically any scenario in which emotional energy and a human experience is the core product
Rare Craftsmanship & Creative Quirks: Think of hyper-personalized items, physical artwork, artisanal or hands-on creations. Items that carry an inherent uniqueness or intangible meaning that an AI might replicate in design, but can’t replicate in “heritage” or provenance.
Risk Tactics
Overall, the best insurance is fostering a dynamic brand and a loyal community that invests personally and emotionally in you. People will buy from those whose values they trust. If you stand for something real, you create an emotional bond that AI can’t break. I’m not talking about superficial corporate social responsibility (nobody cares) but about authenticity that resonates on a near-spiritual level.
As you build your business, erect an ethical moat by providing “failsafe” services where your human personal liability and your brand acts as a shield for AI decisions. This creates trust and differentiation among anonymous pure-AGI play businesses.
Seek and create small, specialized, local, or digital micro-monopolies – areas too tiny or fractal for the “big AI players” to devote immediate resources to. Over time, multiply these micro-monopolies by rolling them up under one trusted brand.
Furthermore, don’t avoid AI. You cannot out-AI the AI. So as you build a business on the human edge moat, you should still harness AI to do 90% of the repetitive and analytic tasks – this frees your human capital to build human relationships, solve ambiguous problem, or invent new offerings.
Bet on What Makes Us Human
To summarize, AI is logical, combinatorial intelligence. The advancements in AI will commoditize logic and disrupt any job and business that is mainly build upon logic as capital. Human – on the other hand – is authenticity. What makes human human and your brand authentic are elements of chaos, empathy, spontaneity. In this context, human is fostering embodied, emotional, culturally contextual, physically immersive experiences. Anything that requires raw creativity, emotional intelligence, local presence, or unique personal relationships will be more AI resilient.
Group experiences, retreats, spiritual or therapeutic gatherings
Artistic expression that thrives on “imperfection”, physical presence, or spontaneous creativity
Infrastructure for AGI
Human-based auditing/verification
Physical data center operations & advanced hardware
Application and embedment of AI in the forms of AGI agents, algorithmic improvements, etc. to make it suitable for everyday tasks and workflow
The real differentiator is whether a business is anchored in the physical world’s complexity, emotional trust, or intangible brand relationships. Everything pure data-driven or standardized is on the chopping block – imminently.
Nowadays, most emails I receive – including technical and legal ones – are undoubtedly written by ChatGPT. Which I’m okay with – but I find it rather funny that I now have to read what an AI has written only to input the context myself into my AI system. We are effectively constraining AI systems to communicate via human intermediaries – which is a laughably stupid and cognitively inefficient approach.
I think it is wasted energy to make AIs even better at mimicking human communication – this energy is better used in developing AI-to-AI communication protocols that bypass human language entirely. Instead of exchanging emails written in human language, AIs should directly exchange action items, structured data, intent vectors, or probabilistic models. How valuable is it really in making AI communication more human-readable? I believe it is about freeing AIs to communicate in their “native language” while humans simply set high-level objectives and constraints. No latency, no information loss, no mental drainage, more time for actual human communication and interaction.
The supplement industry is a study in contrasts. On one end of the spectrum, you have standardized mass-market products, like the multivitamins lining grocery store shelves. On the other, you have the hyper-competitive world of fitness supplements, where brands vie for attention with protein powders, amino acids, and creatine formulas. Online, the landscape is even more fragmented, with countless niche brands peddling proprietary blends and miracle formulas. And at the top of the pyramid, there are the medical-grade supplements, backed by scientific studies and sold at premium prices in pharmacies.
But amidst this dizzying array of options, two critical factors are often conspicuously absent: transparency and fair pricing. In the supplement world, markups of 50 to 500 percent are not just common – they’re the norm. And when it comes to the quality and sourcing of ingredients, most consumers are left in the dark.
The Murky Supply Chain
The truth is, the vast majority of supplement brands are just that – brands. They might have a catchy name, a slick website, and an army of influencers under contract but they’re not actually manufacturing the products they sell. Instead, the majority of brands outsource production to contract manufacturers, who are responsible for sourcing ingredients, mixing formulas, and packaging the final product.
But even these contract manufacturers usually don’t have direct relationships with ingredient suppliers. They usually buy from wholesalers, who in themselves import from other wholesalers from locations like Asia. It’s a game of trade, with each player adding their own markup along the way.
By the time a supplement reaches the consumer, it may have passed through three to five different entities, each taking their cut. The end result? Consumers pay inflated prices, without any real insight into what they’re actually getting.
The Quality Conundrum
Transparency around quality is another major issue in the supplement space. While standardized multivitamins from reputable pharmaceutical companies generally adhere to strict quality control standards, the same can’t be said for many of the products sold online.
To better understand the landscape, we can visualize the supplement market as a quadrant, with quality transparency on one axis and price on the other:
High Quality Transparency, Very High Price: This quadrant includes medical-grade supplements sold in pharmacies and premium brands that invest in extensive third-party testing and ingredient traceability.
High Quality Transparency, Medium Price: Here, we find standardized multivitamins from well-known pharmaceutical companies.
Low Quality Transparency, High Price: This is where many niche online supplement brands and fitness-focused brands reside, often selling proprietary formulas at high prices without clear sourcing information.
Low Quality Transparency, Low Price: Generic store-brand supplements and cheap mass-market fitness products fall into this category, offering minimal information on sourcing or quality control.
The Opportunity: Radical Transparency at Fair Prices
While the bulk of supplement sales (in terms of quantity) occur in the standardized multivitamin segment, the brands commanding the highest margins are often those with low transparency and high prices. They’ve perfected the art of marketing, using influencers to build trust without actually providing full transparency.
Herein lies the opportunity: a supplement brand built on the principles of radical transparency and fair pricing. By vertically integrating the supply chain – cultivating raw ingredients, manufacturing in-house, and selling directly to consumers – it’s possible to dramatically reduce costs while providing unparalleled clarity around sourcing and quality.
The potential for price disruption is significant. By eliminating multiple layers of middlemen and excessive markups, prices could potentially be reduced by 65 to 80 percent compared to current retail averages. This would be achieved through a transparent cost-plus pricing model, with a reasonable markup of 20 to 30 percent to sustain operations.
A Paradigm Shift
At its core, this business model is about stripping away the extraneous and focusing on what matters: high-quality supplements at fair prices, with complete transparency. I believe consumers shouldn’t have to choose between quality, affordability, scientificity, and ethical sourcing – they can have all four.
In many ways, it’s a return to first principles. By questioning the assumptions that have long governed the industry – that complexity is necessary, that opacity is acceptable, that high prices are inevitable – we can envision a new paradigm. One where simplicity, transparency, and accessibility are the driving forces.
My vision is to build such a fully-integrated purpose-driven supplement company that embodies the principles I hold dear: radical transparency, fair prices, and unwavering integrity. By owning every step of the process, from seed to shelf, we can redefine what’s possible in this industry. I believe that when you put people and principles first, success follows.
“Secrets of the UFO” is one of the few books that if you read it open-mindedly, it will change your view of the world and universe forever. It is described as an arrangement of condensed and edited received communications from the UFOs and extraterrestrials. And it starts with three chapters summarizing over 25 years of study of the UFO phenomenon and 14 years of study of the “contactee riddle” by the author Don Elkins.
In this ongoing and updating post, I share my book notes, highlights, and thoughts as I work through the book.
Chapter 1: A Very Strange Phenomenon
The book starts by stating that the book is going to be “either nonsense or the most centrally important thing you could possibly learn”. After reading it, I confirm this statement. If you read the book open-mindedly, you’ll not ask yourself whether UFOs exist, but rather WHO they are and WHY they are visiting our consciousness here on earth.
If we assume the described UFO phenomenons are real, it opens an immense view onto the world and the universe, as it renders many scientific facts we nowadays believe to be true to be false or at least incomplete.
Studying and understanding UFOs and the underlying technologies may validly be “the most important endeavor which we can undertake.”
UFOs & Meteoroids
To put our possibly naive assumption into perspective, the author gives the example of Dr. James E. McDonald, who explained to the U.S. congress in 1968:
Meteors were once described as “stones falling from the sky” and anyone who curiously questioned this narrative were disregarded as stupid peasants. Well, until one researcher took it seriously and then discovered meteoritics.
With UFOs, we are now in a “very similar situation in science”. We ignore and don’t take UFO sightings seriously, because it makes no sense from our current scientific understanding of the universe.
UFOs defy any explanation possible with our current science and understanding of physics.
We have to understand that our current “status quo” of science may be false or at least incomplete.
Scientific Ridicule
Anyone who dares to challenge the current status quo is subject to ridicule. In terms of understanding UFOs, it started in the late 1940s and 50s when the US Air Force – at that time in a Cold War with the Soviet Union – was mystified by UFO sightings. Because it was unexplainable and the technology of UFOs indescribable superior to the military technology the Air Force had access to, they decided it was better to call UFOs a ridiculous fantasy.
But calling it a stupid fantasy doesn’t help anyone. Nothing constructive is achieved by doing so.
As the author underlines: “Ridicule is not part of the scientific method, and people should not be taught it is.”
Unfortunately, this “ridicule” is still in effect today, 47 years after the book was first published.
Technological Breakthroughs
To put it into perspective, we can think about any technology we now accept as normal in our present life. Any technology would have been considered a wild and absurd impossibility a scant 100 years ago.
So can this not also be true for UFO technology?
Yes.
The question then is: How many millennia ahead of us are UFO technologies?
Note: Later chapters will give plenty of descriptions of what these UFO technologies are capable of.
Beyond the Present Level of Reality
So the question is: What is holding us back from asking questions which go beyond our current understanding of reality.
One problem is the current scientific system, which is set up to only investigate the present level of reality within our technological and scientific nexus of thought.
Or as the author says: “The Jesus of thinking or technology which underlies the UFO manifestations may not have any close connection to our present Earthman’s philosophy of reality”
And I agree with the author in this.
Today, the moment we ask questions and venture into the unknown to investigate phenomena beyond our current established framework of thought, what we today believe to be “facts”, we encounter resistance.
Anything that goes beyond the current technological nexus is dismissed as impossible. And I think it is part of human nature. We simply cannot grasp exponential technological improvements.
But if we really want to see technological breakthroughs on the level of UFO technologies, which we can observe, science, politics, entrepreneurs (we all) must open ourselves up to the supernatural and the “impossible”. Without being open-minded, we will not make an evolutionary leap forward.
Today these topics are energy or quantum healing, zero-point energy devices, the enigmatic technologies of UFOs – described later – the vast landscape of consciousness, or the transformative effects of psychedelics (which itself is a thick book we don’t understand and cannot explain).
The next chapters of scientific discovery await in the prospects of telepathy, real human longevity, the frontiers of artificial superintelligence, the intricate art of matter manipulation, the theories of interdimensional travel, and the concepts of antigravity and warp drive technologies.
The book” Secrets of the UFO” is an eye-opener to allow us to leave the rigid confines of current science and encourages us to find an elevated state of consciousness to ultimately find answers to what is now called the impossible.
Today is Monday, 1st January 2024 and I created two new Value Dividend Portfolios. One portfolio representing undervalued stocks with no dividend payment and the second portfolio undervalued stocks with significantly high dividend payments.
If you want to learn more on how I discovered this strategy and how the portfolios were created, you can read my book online or order a copy from amazon.com.
2024 Portfolios
Both portfolios focus solely on the U.S. market and have the following in common:
Piotroski F-score of ≥ 6.00
Altman Z-score of ≥ 3.00
Equity Ratio of ≥ 50.00%
The first portfolio paying no dividends focuses on stocks with:
P/E ratio of ≤ 10
Dividend yield of 0%
The second portfolio paying significant dividends focuses on stocks with:
P/E ratio of ≤ 7
Dividend yield ≥ 2.9%
1. 2024 No Dividend Portfolio
»The Value Dividend Strategy« portfolio paying no dividends consists in total of 7 stocks:
Gulfport Energy Corp GPOR with a current price of $133.20
SurgePays Inc. SURG with a current price of $6.45
MasterCraft Boat Holdings Inc. MCFT with a current price of $22.64
Arcturus Therapeutics Holdings Inc. ARCT with a current price of $31.53
Atkore Inc. ATKR with a current price of $160.00
Profire Energy Inc. PFIE with a current price of $1.81
Livent Corp LTHM with a current price of $17.98
2. 2024 High Dividend Portfolio
»The Value Dividend Strategy« portfolio paying significantly high dividends consists in total of 12 stocks:
ClearOne Inc. CLRO with a current price of $1.08
Chesapeake Energy Corp CHK with a current price of $76.94
Adams Natural Resources Fund Inc. PEO with a current price of $20.63
PhenixFIN Corp PFX with a current price of $42.25
Alliance Resource Partners L.P. ARLP with a current price of $21.18
Cal-Maine Foods Inc. CALM with a current price of $57.39
Stifel Financial Corp 5. SFB with a current price of $20.55
PHX Minerals Inc. PHX with a current price of $3.22
HF Sinclair Corp DINO with a current price of $55.57
Medifast Inc. MED with a current price of $67.22
BlackRock Enhanced Capital and Income Fund Inc. CII with a current price of $19.00
Mesa Royalty Trust MTR with a current price of $13.20
Outlook
Both portfolios have been created solely by stock screening. As shown in »The Value Dividend Strategy«, these portfolios have performed exceptionally fine historically. I highlighted the most promising companies in bold.
This time I’ll look into each company in detail. I will perform a proper due diligence and valuation of each stock to create a third »The Value Dividend Strategy« portfolio with the aim of identifying winners while excluding any company raising a red flag. I might also write deep dives on the most promising stocks.
Subscribe to this newsletter if you wish to receive this portfolio and any deep dives I might write!
If you want to learn more on how I discovered this strategy and how the portfolios were created, you can read my book online or order a copy from amazon.com.
Legal Disclaimer
The content provided in this newsletter is for informational purposes only. The information, analysis, and opinions expressed herein are solely those of Marius Schober and do not represent, reflect or express the views of any other person or entity.
This newsletter does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and you should not treat any of the newsletter’s content as such. Marius Schober does not recommend that any securities, transactions, or investment strategies mentioned in this newsletter are suitable for any specific person.
The information provided in this newsletter is obtained from sources believed to be reliable, but Marius Schober does not guarantee its completeness or accuracy, or warrant its completeness or accuracy. Readers are urged to consult with their own independent financial advisors with respect to any investment.
All information and content in this newsletter are subject to change without notice. Prices, quotes, and other financial information may be out of date or inaccurate. Past performance is not indicative of future results. Investing in securities involves risks, including the potential loss of all amounts invested.
Marius Schober does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of reading any of our publications. You acknowledge that you use the information we provide at your own risk.
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Die deutsche Wirtschaft kollabiert in einem noch nie dagewesenen Tempo. Investoren haben sich dieser Tatsache noch nicht bewusst werden können. Sobald sie dies tun, könnte es zu einer massiven Kapitalflucht aus der Eurozone kommen.
Diese Situation stellt eine ernsthafte Bedrohung für die Stabilität der Euro-Währung und der EU selbst dar. Wir haben das Problem selbst verschuldet. In den letzten zehn Jahren haben die deutschen Wähler mit überwältigender Mehrheit die derzeitige Politik sowohl auf Bundes- als auch auf Landesebene unterstützt und gewählt. Deutschland erntet im Wesentlichen, was es durch demokratische Entscheidungen gesät hat.
Die Folgen einer Deindustrialisierung Deutschlands werden auf dem ganzen Kontinent zu spüren sein. Es entsteht ein perfekter Sturm, der nicht nur unser Land selbst betrifft, sondern auch ganz Europa ins Wanken bringen wird, da der Euro von der Wirtschaftsleistung und dem Rating Deutschlands abhängt. Deutschland ist nicht nur die größte Volkswirtschaft Europas, sondern zugleich auch sein wirtschaftliches Zentrum, das als größter Handelspartner und als Investor in vielen Ländern Europas die verschiedenen Volkswirtschaften miteinander verbindet.
Die Zukunft Europas hängt vom hausgemachten Niedergang einer einst mächtigen Wirtschaftsmacht ab. Ich frage mich, warum die anderen europäischen Staaten, von Frankreich über Italien bis Spanien, nicht mehr Druck auf Deutschland ausüben.
Irgendwann werden die Deutschen aufwachen und die Situation erkennen. Aber ich bin skeptisch, dass sich sofort etwas ändert. Wenn es in der Bevölkerung ein echtes Bedauern gäbe, würde sich das bei künftigen Wahlen zeigen. Der Niedergang des Landes wird sich wahrscheinlich fortsetzen, solange die öffentliche Verleugnung anhält.
Irgendwann werden die Deutschen aufwachen und die Situation erkennen. Aber ich bin skeptisch, dass sich dies rasch ändern wird. Wenn es in der Bevölkerung ein echtes Bewusstsein für die Situation gäbe, würde sich dies bei künftigen Wahlen zeigen. Der Niedergang des Landes wird sich wahrscheinlich fortsetzen, solange die öffentliche Verdrängung anhält.
In a world dominated by financial dynamism, the unexpected can sometimes occur. The BRICS nations (Brazil, Russia, India, China, and South Africa), in a bid to recalibrate the global economic order, recently unveiled speculations around launching a common currency backed by gold, causing ripples of apprehension and excitement across the global markets. The implications of this decision would be vast and could pose a significant challenge to the longstanding dominance of the US dollar – but how realistic is it really?
The ambition of an alternative currency backed by gold shows striking similarities to the post-World War II Bretton Woods accord, which enabled the U.S. dollar to become the global reserve currency. In 1944, as the world war was beginning to ebb, 44 allied nations convened in the sylvan setting of Bretton Woods, a small town in New Hampshire. Here, in an epoch-making agreement, they forged the post-war monetary order which ultimately installed the U.S. dollar as the world’s leading reserve currency. A major feature of the Bretton Woods system was that the U.S. dollar and every currency pegged to the dollar, was convertible into gold at $35 per ounce. This created trust through gold, underscored by America’s considerable repository of gold reserves.
The Bretton Woods system breathed its last in 1971 when the United States forsook its dollar-to-gold conversions. Ever since, the U.S. dollar hegemony endured, now backed by the undeniable political and economic muscles of the United States.
Until today, the US dollar’s pervasive ubiquity in the global financial system was a testament to its resilience and reliability. According to SWIFT, the dollar accounts for around 42% of currency transactions, with the Euro accounting for roughly 32% leaving behind the Chinese yuan with < 2 percent. Furthermore, the International Monetary Fund estimates that nearly 59% of global central bank reserves are held in dollars.
This prominence of the US dollar as the world’s reserve currency has long been a thorn in the side of nations seeking to assert their influence on the global stage. Soon, BRICS countries will gather in Johannesburg, where the assembled ministers and representatives will discourse about ending this US dominance through a common currency and thus reveling in their aspirations for a new economic order. This endeavor to construct a counter-narrative to the post-World War II rules-based world order was prompted in no small part by the sanctions on Russian foreign exchange and gold reserves following the invasion of Ukraine.
Much like Bretton Woods’ design cemented the dollar as the fulcrum of the world economy, the BRICS consortium may be maneuvering to disrupt this long-standing status quo by themselves launching a currency backed by the age-old surety of gold. But the track ahead appears to be riddled with challenges that make this endeavor less a conquest and more a quixotic pursuit.
While the BRICS coalition may envisage a common currency – backed, as per Russian suggestion, by gold as per a Russian – their individual national interests are far too divergent to enable such unity.
The proposal of a single central bank, possibly located in Shanghai, would undoubtedly raise alarm bells, particularly in India. Sino-Indian border tensions and differing strategic interests pose significant barriers to the kind of deep integration necessary for a shared currency. That this discord is real was shown by India’s External Affairs Minister who quickly clarified that India had no plans for a BRICS currency. A liberal democracy-backed currency cannot simply be replaced by a concept dominated by a totalitarian state with capital controls. It is a proposition that defies pragmatism.
Historical precedence provides a further sobering perspective. OPEC as not able to establish a petro-currency and the struggles of the South American “sur” currency underline the inherent difficulties in rallying geographically disparate nations around a common financial cause.
Also, China itself, the most formidable of the BRICS economies, struggles to extend the influence of its yuan even within Asia, outside trade-linked finance. Its share in global transactions is a mere 2%.
The aspiration to supplant the dollar with a new BRICS currency would be a quantum leap, requiring not only economic might but also unprecedented collaboration, mutual trust, and legal harmonizing among these so diverse nations.
The BRICS nations are undoubtedly influential, and their currency proposal warrants attention, but the hurdles for success are high. As it stands, the likelihood of them dethroning King Dollar in the near term appears decidedly slim, given the economic, political, and logistical challenges they face. However, in the shifting sands of global politics and economics, it would be imprudent to discount the potential for change altogether. So, what if?
When we gaze upon the current constellation of global economies and geopolitics, a gold-backed BRICS currency shines brightly as a tantalizing prospect. The appeal of a gold-backed currency hinges in its potential stability. It presents a captivating diversification tool which might provide a bulwark against inflation, geopolitical uncertainties, and U.S. self-interests that plague the dollar. However, while gold has served as a steadfast store of value over centuries, the worth of a gold-backed currency would ultimately remain tethered to the fiscal policies of the BRICS nations. Their commitment to maintaining the gold standard would be the linchpin that could sway the fortunes of such currency.
Nevertheless, the birth of a gold-backed BRICS currency would underscore a seismic shift in geopolitical power, signaling a deviation from the existing dollar and euro hegemony. Such a splintering of the international monetary order could result in an even more unstable geopolitical environment.
While the dollar’s predominance may ruffle feathers, the alternatives on the horizon are hardly formidable. The BRICS nations, while economically and geopolitically significant, are still far from establishing a viable competitor to the US dollar. A global economic shift of this magnitude requires more than wishful thinking. It demands a credible, reliable, and universally acceptable alternative, which, for the time being seems non-existent.
For that action to materialize, we must not look to the east but towards the digital frontier. It is in the world of cryptocurrencies that we may find the true contender to the U.S. reserve currency. A well-designed, decentralized cryptocurrency offers features that no single nation-backed currency can boast. It is impervious to political manipulation, can be transferred instantly across borders, and is accessible to anyone with an internet connection.
A decentralized cryptocurrency also addresses the BRICS nation’s concern of shielding their economies from sanctions and potential economic default. Without the influence of any single nation or political entity, a cryptocurrency operates on its own terms, dictated by cryptographic algorithms rather than the whims of political leaders and financial institutions.
However, this utopian digital landscape is not without its pitfalls. Issues surrounding volatility, security, and regulatory compliance must be addressed for a cryptocurrency to truly challenge the U.S. dollar’s dominance. In the future it may not be the dollar, the yuan, or the rouble on the global financial stage, but a cryptocurrency such as Bitcoin, Ethereum, or some yet-to-be-conceived cryptocurrency that takes on the mantle.
In this unfolding narrative, the real shift in global economic order may come not from the vaults of national treasuries, but from algorithms humming in decentralized data centers around the globe. Unlike a potential BRICS currency, the rise of a decentralized cryptocurrency is not contingent on any single country’s economic heft. Instead, it is shaped by the collective action of millions of individuals and institutions worldwide – truly a currency of the people, by the people, and for the people.
In einer Welt, die von finanzieller Dynamik beherrscht wird, kann manchmal das Unerwartete eintreten. Die BRICS-Staaten (Brasilien, Russland, Indien, China und Südafrika) haben vor kurzem Spekulationen über die Einführung einer gemeinsamen, goldgedeckten Währung in die Welt gesetzt, mit dem Ziel, die globale Wirtschaftsordnung in ein neues Gleichgewicht zu bringen, was auf den globalen Märkten Besorgnis und Aufregung auslöste. Die Auswirkungen dieser Entscheidung wären enorm und könnten die langjährige Dominanz des US-Dollars erheblich in Frage stellen – aber wie realistisch ist das wirklich?
Die Bestrebungen für eine alternative, goldgedeckte Währung weisen auffällige Ähnlichkeiten mit dem Bretton-Woods-Abkommen nach dem Zweiten Weltkrieg auf, durch das der US-Dollar zur weltweiten Leitwährung wurde. Im Jahr 1944, als sich der Weltkrieg dem Ende zuneigte, trafen sich 44 verbündete Nationen in der idyllischen Umgebung von Bretton Woods, einer Kleinstadt in New Hampshire. Hier schmiedeten sie in einem epochalen Abkommen die Währungsordnung für die Nachkriegszeit, die schließlich den US-Dollar als führende Reservewährung der Welt etablierte. Ein wesentliches Merkmal des Bretton-Woods-Systems war, dass der US-Dollar und jede an den Dollar gekoppelte Währung zu 35 Dollar pro Unze in Gold konvertierbar war. Dies schuf Vertrauen durch Gold, was durch Amerikas beträchtliche Goldreserven unterstrichen wurde.
Das Bretton-Woods-System ging 1971 in die Knie, als die Vereinigten Staaten den Umtausch von Dollar in Gold abschafften. Die Hegemonie des US-Dollars hatte seitdem Bestand und wird nun durch die unbestreitbaren politischen und wirtschaftlichen Muskeln der Vereinigten Staaten gestützt.
Bis heute war die Allgegenwärtigkeit des US-Dollars im globalen Finanzsystem ein Beweis für seine Widerstandsfähigkeit und Zuverlässigkeit. Nach Angaben von SWIFT entfallen rund 42 % der Währungstransaktionen auf den Dollar, während der Euro etwa 32 % ausmacht, gefolgt vom chinesischen Yuan mit < 2 %. Außerdem schätzt der Internationale Währungsfonds, dass fast 59 % der weltweiten Zentralbankreserven in Dollar gehalten werden.
Diese Vormachtstellung des US-Dollars als Weltreservewährung ist den Nationen, die ihren Einfluss auf der Weltbühne geltend machen wollen, schon lange ein Dorn im Auge. In Kürze werden die BRICS-Länder in Johannesburg zusammenkommen, wo die versammelten Minister und Vertreter über die Beendigung dieser Vorherrschaft der USA durch eine gemeinsame Währung diskutieren und damit ihre Hoffnungen auf eine neue Wirtschaftsordnung zum Ausdruck bringen werden. Dieses Bestreben, eine Gegenerzählung zur regelbasierten Weltordnung nach dem Zweiten Weltkrieg zu konstruieren, wurde nicht zuletzt durch die Sanktionen gegen die russischen Devisen- und Goldreserven nach der Invasion in der Ukraine ausgelöst.
Ähnlich wie die Regelung von Bretton Woods den Dollar als Dreh- und Angelpunkt der Weltwirtschaft zementierte, könnte das BRICS-Konsortium versuchen, diesen langjährigen Status quo zu durchbrechen, indem es selbst eine Währung einführt, die durch die uralte Sicherheit des Goldes gestützt wird. Doch der Weg dorthin scheint mit Herausforderungen gespickt zu sein, die dieses Vorhaben weniger zu einer Eroberung als vielmehr zu einem quixotischen Unterfangen machen.
Die BRICS-Koalition mag zwar eine gemeinsame Währung ins Auge fassen, die nach russischem Vorschlag durch Gold gedeckt ist, doch sind ihre individuellen nationalen Interessen viel zu unterschiedlich, um eine solche Einigung zu ermöglichen.
Der Vorschlag einer einheitlichen Zentralbank, möglicherweise mit Sitz in Shanghai, würde zweifellos die Alarmglocken schrillen lassen, insbesondere in Indien. Die Spannungen an der chinesisch-indischen Grenze und die unterschiedlichen strategischen Interessen stellen ein erhebliches Hindernis für die Art von tiefgreifender Integration dar, die für eine gemeinsame Währung erforderlich ist. Dass diese Uneinigkeit real ist, zeigte der indische Außenminister, der schnell klarstellte, dass Indien keine Pläne für eine BRICS-Währung hat. Eine von einer liberalen Demokratie getragene Währung kann nicht einfach durch ein Konzept ersetzt werden, das von einem totalitären Staat mit Kapitalkontrollen beherrscht wird. Das ist ein Vorschlag, der sich dem Pragmatismus entzieht.
Ein historischer Präzedenzfall bietet eine weitere ernüchternde Perspektive. Die Tatsache, dass die OPEC nicht in der Lage war, eine Petrowährung einzuführen, und die Schwierigkeiten der südamerikanischen “Sur”-Währung zeigen, wie schwierig es ist, geografisch weit auseinander liegende Nationen um eine gemeinsame finanzielle Sache zu versammeln.
Auch China selbst, die mächtigste der BRICS-Volkswirtschaften, tut sich schwer damit, den Einfluss seines Yuan selbst innerhalb Asiens und außerhalb des handelsbezogenen Finanzwesens auszuweiten. Sein Anteil an den weltweiten Transaktionen liegt bei nur 2 %.
Das Bestreben, den Dollar durch eine neue BRICS-Währung abzulösen, wäre ein Quantensprung, der nicht nur wirtschaftliche Macht, sondern auch eine noch nie dagewesene Zusammenarbeit, gegenseitiges Vertrauen und rechtliche Harmonisierung zwischen diesen so unterschiedlichen Nationen erfordert.
Die BRICS-Staaten sind zweifellos einflussreich, und ihr Währungsvorschlag verdient Beachtung, aber die Hürden für einen Erfolg sind hoch. Angesichts der wirtschaftlichen, politischen und logistischen Herausforderungen, mit denen sie konfrontiert sind, scheint die Wahrscheinlichkeit, dass sie den US-Dollar in naher Zukunft entthronen, ausgesprochen gering. Angesichts der politischen und wirtschaftlichen Veränderungen in der Welt wäre es jedoch unvorsichtig, das Potenzial für einen Wandel gänzlich außer Acht zu lassen. Was wäre also, wenn?
Betrachtet man die derzeitige Konstellation der Weltwirtschaft und der Geopolitik, so erscheint eine goldgedeckte BRICS-Währung als eine verlockende Perspektive. Der Reiz einer goldgedeckten Währung liegt in ihrer potenziellen Stabilität. Sie stellt ein faszinierendes Diversifizierungsinstrument dar, das ein Bollwerk gegen Inflation, geopolitische Unsicherheiten und die Eigeninteressen der USA, die den Dollar plagen, bilden könnte. Auch wenn Gold über Jahrhunderte hinweg als zuverlässiger Wertaufbewahrer gedient hat, wäre der Wert einer goldgedeckten Währung letztlich von der Finanzpolitik der BRICS-Staaten abhängig. Ihr Engagement für die Beibehaltung des Goldstandards wäre der Dreh- und Angelpunkt, der die Geschicke einer solchen Währung beeinflussen könnte.
Nichtsdestotrotz würde die Geburt einer goldgedeckten BRICS-Währung eine seismische Verschiebung der geopolitischen Macht unterstreichen und eine Abkehr von der bestehenden Dollar- und Euro-Hegemonie signalisieren. Eine solche Zersplitterung der internationalen Währungsordnung könnte zu einem noch instabileren geopolitischen Umfeld führen.
Die Vorherrschaft des Dollars mag zwar für Aufregung sorgen, doch die sich abzeichnenden Alternativen sind kaum beeindruckend. Die BRICS-Staaten sind zwar wirtschaftlich und geopolitisch von großer Bedeutung, aber noch weit davon entfernt, eine tragfähige Konkurrenz zum US-Dollar zu schaffen. Ein weltwirtschaftlicher Wandel dieses Ausmaßes erfordert mehr als nur Wunschdenken. Sie erfordert eine glaubwürdige, verlässliche und allgemein akzeptierte Alternative, die es im Moment nicht zu geben scheint.
Damit dies geschieht, dürfen wir nicht nach Osten schauen, sondern müssen den Blick auf die digitalen Grenzen richten. In der Welt der Kryptowährungen könnten wir den wahren Konkurrenten für die US-Reservewährung finden. Eine gut durchdachte, dezentralisierte Kryptowährung bietet Eigenschaften, die keine einzelne staatlich gestützte Währung vorweisen kann. Sie ist unempfindlich gegen politische Manipulationen, kann sofort über Grenzen hinweg transferiert werden und ist für jeden mit einer Internetverbindung zugänglich.
Eine dezentralisierte Kryptowährung trägt auch dem Anliegen der BRICS-Staaten Rechnung, ihre Volkswirtschaften vor Sanktionen und einem möglichen wirtschaftlichen Ausfall zu schützen. Ohne den Einfluss einer einzelnen Nation oder politischen Einheit funktioniert eine Kryptowährung nach ihren eigenen Bedingungen, die von kryptografischen Algorithmen diktiert werden und nicht von den Launen politischer Führer und Finanzinstitutionen.
Diese utopische digitale Landschaft ist jedoch nicht ohne Tücken. Damit eine Kryptowährung die Vorherrschaft des US-Dollars wirklich herausfordern kann, müssen Fragen zur Volatilität, Sicherheit und Einhaltung von Vorschriften geklärt werden. In der Zukunft werden vielleicht nicht der Dollar, der Yuan oder der Rubel auf der globalen Finanzbühne stehen, sondern eine Kryptowährung wie Bitcoin, Ethereum oder eine noch zu entwickelnde Kryptowährung, die die Vorherrschaft übernimmt.
In diesem sich entwickelnden Narrativ könnte die wirkliche Verschiebung der globalen Wirtschaftsordnung nicht aus den Tresoren der nationalen Finanzämter kommen, sondern von Algorithmen, die in dezentralen Datenzentren rund um den Globus summen. Im Gegensatz zu einer potenziellen BRICS-Währung ist der Aufstieg einer dezentralen Kryptowährung nicht von der wirtschaftlichen Stärke eines einzelnen Landes abhängig. Stattdessen wird er durch das kollektive Handeln von Millionen von Einzelpersonen und Institutionen auf der ganzen Welt geprägt – eine echte Währung des Volkes, durch das Volk und für das Volk.
In my book “The Value Dividend Strategy”, which was published in late November 2022, I provided readers with two portfolios which, at that time, fulfilled the criteria of what I named The Value Dividend Strategy.
The book is based on extensive research I did as part of my bachelor thesis. In my research process, I stumbled upon value stocks which outperformed not only the market but nearly as often also the general value portfolio they were part of.
These stocks were in particular undervalued stocks which either pay a significantly high dividend or no dividend at all. For investors, these stocks are raising suspicion as outliers. An extremely high dividend seems too good to be true, while the lack of dividends is equally unusual for value stocks. As it turns out, these stocks historically performed phenomenally good, especially towards the end and coming out of a market recession.
After I published my book and sold the first hundreds of copies over the recent months, a handful of investors asked me to please regularly update the Value Dividend portfolios and to extend my research. With this newsletter, I will create and update the Value Dividend portfolios every quarter and transparently publish performance reviews of how each portfolio performed in the past. Furthermore, I will identify the winning stocks of each portfolio, which were raising the performance, and write deep dive analyses on these selected stocks. Another part I deem extremely important as an investor is an understanding of the macroeconomic environment – not to time the market, but to identify opportunities where others cannot yet see them. In this newsletter, Value & Dividends, I will also write research newsletter on undervalued sectors and macroeconomic opportunities and risks.
Q4 2022 Value Dividend Portfolios
On 21st of October 2022, I screened the U.S. stock market according to The Value Dividend Strategy criteria. As a result, I created two portfolios: one focused on value stocks which paid a significantly high dividend and one focused on value stocks which paid no dividends at all.
In my book, I emphasized that The Value Dividend Strategy is particularly effective and yields the best returns when implemented towards the end of a recession. Nevertheless, in this performance review, we will assess the performance of the two portfolios I established in October 2022.
I never expected that I’d expand or delve into the portfolios again. For this reason, I will focus for simplicity on the performance of the portfolios from the date of the creation of the portfolio (21/10/2022) to today (13/07/2023). Thereby we’re looking at the performance after approximately 8.8 month or 38 weeks.
However, moving forward, I will track and publish performance updates on a quarterly, half-yearly, and yearly basis.
At the time of creation, all stocks within the Value Dividend portfolios displayed a low P/B ratio, high or no dividend payments, an Altman Z score of > 2.99, a Piotroski F-Score of >6, and an Equity-to-asset ratio of <0.5.
Performance of the Dividend Portfolio
The Value Dividend portfolio with high dividends consisted of 14 stocks.
As I am writing this, the overall performance since creation of the portfolio is 26.48% excluding paid-out dividends.
The average dividend yield of this portfolio was 4.2% at the date of creation.
The average performance of 26% comes with a standard deviation of 31%. The highest performance showed InterDigital Inc. (IDCC) with 104% while Valero Energy Corp (VLO) performed worse with -8% – simultaneously VLO was the only stock in this portfolio with a negative performance.
The average dividend yield is approximately 4.19%, with a standard deviation of 1.84%. This indicates a wide range of dividend yields among the companies, with a maximum yield of 8.98%.
When we look at the distribution of stock performance, we can see that most of the stocks have gained between 0% and 40% with two notable exceptions exhibiting a much higher performance.
When we look at the correlation between performance and dividend yield, we can see a moderate positive correlation. This suggests that higher-performing stocks also tended to have higher dividend yields, which proves the point of The Value Dividend Strategy.
Top 5 Performers of the Value Dividend High Dividend Portfolio:
InterDigital Inc IDCC with a gain of 104%
Patrick Industries Inc PATK with a gain of 91%
LCI Industries Inc LCII with a gain of 35%
Ingredion Inc INGR with a gain of 34%
Celanese Corp CE with a gain of 32%
Hypothetically, by investing in these five stocks, one could’ve achieved a return of 59% with – important to note – value stocks.
Bottom 5 Performers of the Value Dividend High Dividend Portfolio:
Valero Energy Corp VLO with a loss of 7.6%
Exxon Mobil Corp XOM with a gain of 2%
Phillips 66 PSX with a gain of 4%
Global Partners LP GLP with a gain of 8%
Huntsman Corp HUN with a gain of 9%
As we can see, particularly VLO has been a bad pick. The question is not why VLO had been a bad pick, but how we can avoid picking losers in the future altogether. I want to answer this question in this continuous newsletter by through deep dives, not only in promising Value Dividend stocks but also into suspicious ones and perform a due diligence, valuation, and margin-of-safety calculations. If you haven’t already, I welcome you to subscribe!
Performance of the Non-Dividend Portfolio
The Value Dividend portfolio which paid no dividends consisted of 21 stocks.
As I am writing this, the overall performance since creation of the portfolio is 26.06%.
In the Value Dividend portfolio which pays no dividends, the average performance was 26% with a standard deviation of 47%. This standard deviation is quite high, as some stocks performed exceptionally well (155.79%) while others showed high losses (-46.18%).
Looking at the distribution of returns, we see that most of the stocks in the Non-Dividend portfolio show returns of 0 to 60% with a few notable exceptions exhibiting much higher or lower performance.
This was to be expected, as I observed similar high standard deviations during my study of Value Dividend stocks. Yet, as we can see, with a performance of 26% of the overall portfolio we still achieved higher returns than the S&P 500, which gained 13.23% over the same period of time.
When we look at correlations, it may be worth noting that there is a moderate negative correlation between performance and P/B ratios. Stocks with a higher performance had lower P/B ratios which may be because they were undervalued.
Top 5 Performers of the Value Dividend Non-Dividend Portfolio:
Builders FirstSource Inc BLDR with a gain of 156%
AutoNation Inc AN with a gain of 86%
Asbury Automative Group Inc ABG with a gain of 78%
GMS Inc GMS with a gain of 70%
US Goods Holding Corp USFD with a gain of 62%
Hypothetically, investing in these 5 Value Dividend stocks would’ve resulted in a 90% gain with low P/B stocks.
With non-dividend paying value stocks, the challenge is to weed out the bad performers, while focussing on the high performers.
Bottom 5 Performers of the Value Dividend Non-Dividend Portfolio:
United Natural Foods Inc UNFI with a loss of 46%
Ascent Industries Co ACNT with a loss of 37%
Stride Inc LRN with a loss of 20%
TrueBlue Inc TBI with a loss of 18%
DLH Holdings Corp DLHC with a loss of 17%
By looking at the bottom performers, it becomes clear how risky this strategy can be, if focussed on the wrong stocks and if one avoids diversification. With diversification, the overall portfolio nevertheless gained 26% – despite having several double-digit loss stocks in the portfolio.
As part of this ongoing Value & Dividends newsletter, I will dive deep into individual non-dividend paying stocks, to learn how we can promptly avoid investing in these losers stocks.
To set these performances in perspective: Over the same period of time, from October 21, 2022, to today, the S&P 500 gained 13.23% and the Vanguard Value Index Fund ETF (VTV) gained 8.88%. Thereby, both Value Dividend portfolios outperformed the index and the overall value index.
If you want to learn more on how I discovered this strategy and how the portfolios were created, you can read my book online or order a copy from amazon.com.
Résumé
Since publishing my book The Value Dividend Strategy, we can see that Value Dividend portfolios still outperform the index and large diversified value portfolio. With this newsletter and blog, I will continuously update, refine, and expand The Value Dividend Strategy. I will dive deep into selected promising or suspect Value Dividend stocks to find clear winners and loser within the small range of Value Dividend stocks.
Furthermore, I’ve been majorly invested in Palantir PLTR which does not fulfill Value Dividend criteria per se, but which was a stock clearly undervalued in 2022 and gained in 100% since October 21st 2022. As soon I detect other unique undervalued growth stocks, they will also have their place in Value & Dividends.
In combination with critical macroeconomic analysis, I aim to provide real value and real dividends to readers of this newsletter.
If you haven’t already – I invite you to join the Value & Dividends community and I appreciate your subscription to this publication.
The content provided in this newsletter is for informational purposes only. The information, analysis, and opinions expressed herein are solely those of Marius Schober and do not represent, reflect or express the views of any other person or entity.
This newsletter does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and you should not treat any of the newsletter’s content as such. Marius Schober does not recommend that any securities, transactions, or investment strategies mentioned in this newsletter are suitable for any specific person.
The information provided in this newsletter is obtained from sources believed to be reliable, but Marius Schober does not guarantee its completeness or accuracy, or warrant its completeness or accuracy. Readers are urged to consult with their own independent financial advisors with respect to any investment.
All information and content in this newsletter are subject to change without notice. Prices, quotes, and other financial information may be out of date or inaccurate. Past performance is not indicative of future results. Investing in securities involves risks, including the potential loss of all amounts invested.
Marius Schober does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of reading any of our publications. You acknowledge that you use the information we provide at your own risk.
By subscribing to this newsletter, you acknowledge and agree to the terms of this disclaimer.
