Value Trap

Theory of Universal Valuation

Non-Fiction - Business/Finance
356 Pages
Reviewed on 05/05/2019
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Author Biography

Brian Michael Nelson is the president of equity and dividend growth research and ETF analysis at Valuentum Securities.

He is the architect behind the company’s research methodology and processes, developing the Valuentum Buying Index rating system, the Economic Castle rating, and the Dividend Cushion ratio. Mr. Nelson has acted as editor-in-chief of the firm’s Best Ideas Newsletter and Dividend Growth Newsletter since their inception.

Before founding Valuentum in early 2011, Brian worked as a director at Morningstar, where he was responsible for training and methodology development within the firm's equity and credit research department. Prior to that position, he served as a senior industrials securities analyst covering aerospace, airlines, construction, and environmental services companies.

Before joining Morningstar in February 2006, Mr. Nelson worked for a small capitalization fund covering a variety of sectors for an aggressive growth investment management firm in Chicago. He holds a Bachelor's degree in finance and a minor in mathematics, magna cum laude, from Benedictine University. Mr. Nelson has an MBA from the University of Chicago Booth School of Business and also holds the Chartered Financial Analyst (CFA) designation.

    Book Review

Reviewed by Romuald Dzemo for Readers' Favorite

Value Trap: Theory of Universal Valuation by Brian M Nelson is a relevant book for investors, breaking ground for readers who want to understand stock pricing and how to beat the next financial crisis. That sounds daring, but reading this book offers convincing arguments, facts, and analysis of the author’s theory of universal valuation and how investors can use it to leverage on the bubbles that occasionally shake the financial markets. In this book, the author provides “the variant opinion that may have saved investors tons of money” and offers guidelines and a framework for savvy investors.

Brian Nelson is former Director of Methodology at Morningstar and President of Investment Research at Valuentum and he brings more than fifteen years of work and research to this book, articulating brilliantly and confidently on a variety of topics, to wit, the philosophy and potholes in the stock pricing game, the sensitivity of value and the volatility in prices, the duration of value composition, and a lot more. The author introduces new concepts and talks about behavioral valuation and the theory of universal valuation while exploring ways that the reader can use them to make informed choices when investing in the stock market.

This book invites readers into dialogue and discussion about some of the troubling trends in stock investment management business and proposes a path that enables readers to invest with confidence. Brian M Nelson is an expert in his field and confidence is conveyed in his writing, as well as interesting stories filled with valuable lessons and references that add credibility to his claims. Here is the one book that every conscientious investor should read; it is informative and very accessible and packed with knowledge, insight, and wisdom.