In a recent presentation, The Oxford Club’s Marc Lichtenfeld said that a “fundamental shift is rocking the markets” and that, right now, we are entering the “Era of Valorem.”
According to Lichtenfeld, stocks are “WAY overvalued right now,” and as investors move out of “overvalued tech stocks,” a new bull market has begun in “Valorem stocks.”
Long story short, he predicts that, over the next 12 months, 500% or more gains could be possible with three Valorem stocks he’s interested in. However, the catch is that the only way to access his Valorem picks is to join The Oxford Income Letter for $49.
So, I decided to look into Lichtenfeld’s claims to find out what his Valorem prediction is all about and find out what stocks he’s teasing.
And in this post, I’ll show you what I found, including what I think two of his “Valorem” picks are, based on the clues he shared in the presentation.
Unpacking Lichtenfeld’s “Era of Valorem” Pitch
Investment guru Marc Lichtenfeld claims that a new bull market is beginning, which he refers to as the “Era of Valorem.”
Lichtenfeld suggests that this “era” is a fundamental once-in-a-generation shift, where a new class of stocks he calls “Valorem stocks” will outperform the market.
“Because a new bull market is just beginning now.
“What I’m calling the ‘Era of Valorem’ will change how EVERYONE looks at stocks.
“Fundamental shifts like this happen only once in a generation.
“And it’s all starting RIGHT NOW.
“This new class of stocks I call ‘Valorem stocks’ is outperforming the market left and right.”Source: https://pro.oxfordclub.com/p/ERATO79BRKLT2YRDSOSAOSALTTOT/NBRKY205/Full
What is a Valorem stock?
Marc Lichtenfeld suggests that a “Valorem stock” is a value stock.
“So what are Valorem stocks, exactly?
“If you took any Latin classes, you already know that ‘valorem’ is Latin for ‘value.’
“In the investing world, targeting ‘Valorem stocks’ is a method of identifying the few stocks that are available at incredible prices… even when the rest of the market is extremely expensive.”
So, Lichtenfeld uses the word “Valorem” in place of “value” in the presentation, which means when he says “Valorem stock,” he’s (actually) talking about value stocks.
As a side note, the only reference I could find to the term Valorem is the phrase “ad valorem,” which means “according to value” in Latin. And as for why Lichtenfeld calls them Valorem stocks instead of value stocks is anyone’s guess.
However, it’s common for investment gurus to rename things to make a presentation more interesting since it adds an element of mystery. So, that’s probably why.
In any case, Lichtenfeld also said that targeting Valorem stocks is all about “identifying the few stocks that are available at incredible prices,” which is akin to value investing.
Value investing is all about finding high-quality stocks that appear to be underpriced relative to their intrinsic value. And it involves using fundamental analysis to gain insight into the company’s business model, brand, earnings, free cash flow, and many other metrics.
So, that’s what the presentation is all about – value investing.
Why is Marc Lichtenfeld so bullish on value stocks?
According to Lichtenfeld, value stocks almost always outperform growth stocks, especially when growth stocks are “outrageously expensive.”
And he believes “that’s where we are now,” the point at which value stocks start outperforming growth stocks.
In case you’re unfamiliar with what a growth stock is, these are shares in public companies that are expected to grow revenue more rapidly than the market. Investors who target growth stocks are typically interested in capital gains, whereas value investors seek less speculative stocks and look for opportunities to earn dividend income.
Growth stocks are commonly found in the tech sector, too, which likely explains why Lichtenfeld is so bearish on the tech sector. At one point, the presentation stated that the “tech boom is collapsing right in front of our eyes.”
Lichtenfeld explains that the pandemic “led to an explosion in stay-at-home tech stocks like Zoom, Peloton, Amazon and more.” And at the same time, the “Fed was pumping an unprecedented amount of cash into the markets.” However, he claims that due to inflation and reduced stimulus, that’s all changing.
“But now something has changed once again.
“Inflation has hit harder than ever… and the Fed is cutting back the stimulus.
“The traders are bailing out of those stay-at-home tech stocks.
“And prices are collapsing.”
And according to Lichtenfeld, the tech losing streak will continue:
“And we are going to continue seeing this. Stocks are still WAY overvalued right now.
“This is the most expensive stock market in HISTORY, with the exception of the dot-com bubble.”
Lichtenfeld also said that, just as tech-related growth stocks are overpriced, there’s a “signal” showing him that value stocks could be about to take off.
And from what I understand, that “signal” is the spread (AKA difference) between how value stocks and growth stocks are currently valued.
“The spread between growth stocks and value stocks has NEVER been bigger.
“The gap is bigger than it was during the dot-com bubble!
“That’s the BIG signal.
“Every single time this chart reaches an extreme low…
“Value stocks take off.
“And it’s hitting one right now.”
So, to sum it up, Marc Lichtenfeld’s prediction centers around how he believes growth stocks, particularly those in the tech sector, will continue declining. And how value stocks (AKA Valorem stocks) could outperform from here on out.
“As everyone moves out of the overvalued tech stocks, a new bull market has begun in what I call Valorem stocks.
“That’s because in inflationary times – like right now – Valorem stocks have proven to be some of the best performers time and time again across history.”
However, Lichtenfeld doesn’t suggest going out and buying random value stocks. Instead, he talked about how there are three “Valorem” stocks he’s interested in.
What Are Lichtenfeld’s 3 Valorem Stock Picks?
Note: When I first wrote this in March 2022, I wasn’t sure what Lichtenfeld’s second pick was. However, after publishing this, I looked into a different presentation that, based on the clues, teased the same company, which prompted me to revisit this. So what follows is an update to my original post that includes my guess on Lichtenfeld’s second pick.
During the presentation, Marc Lichtenfeld said there are three Valorem stocks he’s interested in that could see gains of 500% or more in the next 12 months.
“I’ve uncovered three Valorem stocks in particular that I predict could soar 200%… 500%… or more in the next 12 months.”
He doesn’t reveal the names of the companies he’s bullish on, but he does say that each pick is cheap, represents great value, and generates “tons” of rising income.
He also shares the following clues about each of his picks:
- Lichtenfeld’s first Valorem stock pick is a company that sells popular financial products for retirees. According to Lichtenfeld, the company paid $1.7 billion to shareholders in 2021 and has increased its dividend payment to shareholders since 2009.
- The second Valorem pick is an energy company that Lichtenfeld says is paying $3.9 billion to shareholders this coming year and says the stock has increased its payments for “24 straight years.” The only other clue he shares is that it’s trading for $20. Also, Lichtenfeld shared a chart of the company’s revenue increasing each quarter.
- According to Lichtenfeld, his third Valorem stock pick is “the most cash-rich biotech on the market” that pays a “hefty, rising dividend.” He also says the company has the rights to the bestselling drug of 2020, 2019, 2018, and 2017.
What could these stocks be?
I thought the first one might’ve been MassMutual, but that doesn’t seem to match upon taking a closer look. So I’m not sure what this one is.
As for Lichtenfeld’s second pick, I think that could be Enterprise Products Partners L.P. (ticker: EPD), a U.S. midstream natural gas and crude oil pipeline company.
Why? Because firstly, this company has been paying an increasing dividend to shareholders since 1998, which matches the first clue.
Second, some back-of-the-napkin math suggests that the “$3.9 billion” clue seems to (roughly) line up when you look at the number of shares outstanding and the dividend paid per share.
Third, the company’s share price was around $23 in January 2022 when the presentation was released and around $21 the month prior, which may have been when the presentation was recorded.
And fourth, the clue about the company’s quarterly revenue matches this company.
So, I think Enterprise Products Partners is Lichtenfeld’s second pick.
What about his third “Valorem” pick?
Based on the clues, I think that’s AbbVie (ABBV).
Why? My research shows that AbbVie had the bestselling drug (Humira) in 2017, 2018, 2019, and 2020. And while that’s not a lot to go off, it’s a pretty specific clue.
Not to mention, the company’s dividend has been increasing for many years. So, this is the most likely stock based on the clues Lichtenfeld shares in the presentation.
How does Lichtenfeld find these so-called “Volarem” stocks?
Lichtenfeld says the price-to-free cash flow ratio, which he describes as the “dollars and cents left after a company pays its bills,” helps him target the best value stocks. And he says the reason he uses this is that earnings can be manipulated through clever accounting.
“The price-to-free cash flow ratio. Or P/FCF ratio for short.
“This little-known ratio helps me target the best value stocks in the market.
“Why price to free cash flow?
“Well, ‘earnings’ is a number that can be – and often IS – manipulated by clever accounting.
“But it’s much more difficult to lie about cash flow. It’s the dollars and cents left after a company pays its bills.”
I’m not an expert on the P/FCF ratio, but from what I can gather, the lower the number is, the less expensive the company is considered by those who use this measure. And according to Lichtenfeld, he looks for companies with a P/FCF ratio of 10 or below.
How do you invest in Valorem stocks?
Valorem stocks aren’t an actual type of stock. Instead, this is the term Marc Lichtenfeld uses to describe value stocks. And he shares his top Valorem stock picks (AKA value stock picks) in a report titled “How to Get Rich in the Era of Valorem.”
And the only way to access that report is to join The Oxford Income Letter for $49. So, in the next section, I’ll walk you through what this service is and how it works.
Recommended: Go here to see my #1 rated stock advisory of 2022
What Is The Oxford Income Letter?
The Oxford Income Letter is an income-focused stock advisory run by Marc Lichtenfeld of The Oxford Club that was launched nine years ago.
According to Lichtenfeld, he uses the “to help regular folks lock in the income they need” and “the retirement they deserve.” He also says that the service gives you everything you need to prosper in the “Era of Valorem,” AKA the era of value stocks.
The service costs either $49, $79, or $129, depending on which membership option you choose, and the main component of the service is the monthly newsletter.
Each issue of The Oxford Income Letter details Marc Lichtenfeld’s latest dividend stock pick, his research on the investment, and how he suggests taking advantage of it.
You also get access to four income-focussed model portfolios, which Lichtenfeld says are “handcrafted to support the most common income goals” his readers have.
Aside from that, subscribers receive some bonus reports and training videos.
The first report is the one I mentioned earlier (How to Get Rich in the Era of Valorem), and the second one is called “5 Growth Stocks to Avoid in 2022.” As the name suggests, this report details five stocks Marc Lichtenfeld recommends avoiding this year.
The training videos are part of a series called “Dividend Riches: Marc Lichtenfeld’s Income Investing Video Series.” The series walks you through Lichtenfeld’s dividend investing strategy, shows you what dividends to look for, talks about portfolio structure, shares tips on reducing taxes on dividends, and discusses maximizing dividend yields.
There are some other aspects to the Oxford Income Letter service, but that’s the gist of what it’s about and how it works. And according to the Oxford Club website, there is a one-year refund policy in place with the service.
Who Is Marc Lichtenfeld?
Marc Lichtenfeld is the editor of The Oxford Income Letter and four other Oxford Club advisories, including Technical Pattern Profits, Lightning Trend Trader, Predictive Profits, and Oxford Bond Advantage.
Each service focuses on different investments. However, Marc Lichtenfeld’s specialty is dividend investing, and he says he’s known as one of the top retirement experts.
According to his profile on The Oxford Club website, Lichtenfeld started his career as a trader at Carlin Equities before moving to Avalon Research Group as a senior analyst.
And according to Lichtenfeld, he has made some noteworthy predictions since getting into the financial education space.
For example, he claims to have warned of the 2020 market crash at the start of 2020 and says he predicted inflation in Sep 2020 before most other gurus talked about it.
He also claims to have recommended numerous triple-digit stocks, including Raytheon Technologies, Digital Realty Trust, and Texas Instruments.
Aside from stock picks, Lichtenfeld has published a best-selling finance book called “Get Rich With Dividends: A Proven System for Double-Digit Returns,” and he’s been featured on CNBC, Fox Business, and Yahoo Finance.
None of that means you’re guaranteed to make money following his picks, but my research suggests that Marc Lichtenfeld is an expert when it comes to dividend investing.
Is the Era of Valorem Presentation Legit?
On the one hand, there’s no such thing as a “Valorem stock.” This is essentially just marketing “spin” used to describe value stocks. And in my opinion, it’s designed to make Lichtenfeld’s presentation about value stocks more enticing.
There’s also no guarantee that Lichtenfeld’s Volarem stock picks will help you make money, let alone deliver 500% gains in 12 months, as the presentation suggests.
So, you might want to take the marketing with a grain of salt.
However, I don’t believe the presentation is a scam. Lichtenfeld shares his analysis of what’s going on in the markets and predicts that certain value stocks will outperform growth stocks moving forward. Whether or not that will happen is another story, but Lichtenfeld makes a compelling case for why he believes this in the presentation.
Of course, the whole thing leads to a pitch for The Oxford Income Letter. And the only way to see what Lichtenfeld’s “Valorem” stock picks are is to read the report that comes with an Oxford Income Letter subscription.
But that’s a legitimate, long-running advisory service. And it’s backed by The Oxford Club, a respected financial publishing company.
So, while there’s no guarantee you’ll make money following Lichtenfeld’s prediction or stock picks, the Era of Valorem presentation is legit, as is The Oxford Income Letter.
Marc Lichtenfeld’s “Era of Valorem” prediction centers around how he believes value stocks are outperforming growth stocks now and will continue doing so.
He doesn’t share his top three Valorem stocks, but based on the clues he shares, I believe one of his picks could be AbbVie, an American biopharmaceutical company.
Is The Oxford Income Letter worth it?
As mentioned, The Oxford Income Letter is legit. And for $49, it could be worth joining if you’re interested in learning how to become a value investor.
I say this because Marc Lichtenfeld is an expert on income-focused investments. And the service gives you all his latest picks, research, and training materials aimed at helping you become a successful income investor.
However, there are alternative services I’ve reviewed, like Dan Ferris’ Extreme Value or Lyn Alden’s Premium Research, which are both value-investing style advisories.
Or, if you’re looking for a completely different approach, Marc Lichtenfeld’s colleague, Matthew Carr, runs a service I’ve written about called Oxford Growth Investor.
Either way, I hope this post has helped demystify Lichtenfeld’s “Valorem” prediction and if you’d like to share your take on any of this, see the comment section below.