00:00:00Intro
00:00:32Weekly Wrap
00:01:36What Worked in Value
00:02:22What Didn't Work
00:02:49On the Hunting Trail for Value
00:03:41Wrapping Up
00:04:01Disclaimer
SOBRE ESTE EPISÓDIO
Today is Friday, September 18th 2026. Investors often say "I've seen this movie before" for a series of events that reminds them of years ago. A long career isn't required for this action though, as we saw AI infrastructure relentlessly rally through June 2026, only to plummet in July as leverage unwound. Apparently investors liked that movie because we're doing it again here in September.
In my portfolio are companies like H&R Block, which pays a 4.2% dividend, repurchases over 7% of its shares annually, and is growing profits at mid single digits. HRB trades at 6 times next years earnings per share. That's right, a single digit P/E ratio for a growing company.
What didn't work?
Clearly the short-term is against value, so investors' patience is being tested. As I mentioned, the same trades happened in June of this year, with AI infrastructure going up while value went down. I called it a black hole - the gravity of AI infrastructure is attracting capital away from other stocks. It didn't end well in July and I don't think it will end well this time. Until then, value is not working.
Next up is On the Hunting Trail for Value
If you're on the hunting trail, know that you can leave the trail, put your feet up, and make 5% risk free in the US ten year bond. For companies that have little to no profits today but expected to grow significantly in the future, this higher discount rate means their shares should trade lower today. That is not happening and that is the danger I see on the trail.
Wrapping Up:
The AI Infrastructure trade kicked back into high gear this week, but investors who lived through this summer know what happens when the trap door opens. If you let the numbers guide you, there is certainly opportunity in value, but it will take some guts to avoid the FOMO from the growth stocks. Thanks for listening and have a great weekend.
Website: https://frankfunds.com
Brian X Account: https://x.com/bfrankvalue
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. You may obtain performance data current to the most recent month-end by calling the Fund at 1-888-217-5426 or visiting our website at www.frankfunds.com. Returns include reinvestment of any dividends and capital gain distributions.
Non-FDIC insured. May lose value. No bank guarantee. The Fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the Fund, and it may be obtained by calling 1-888-217-5426. Please read it carefully before you invest or send money.
This publication does not constitute an offer or solicitation of any transaction in any securities. Any recommendation contained herein may not be suitable for all investors. Information contained in this publication has been obtained from sources we believe to be reliable, but cannot be guaranteed.
The information in this portfolio manager letter represents the opinions of the individual portfolio managers and is not intended to be a forecast of future events, a guarantee of future results or investment advice. Also, please note that any discussion of the Fund's holdings, the Fund's performance, and the portfolio managers' views are as of the date of this recording and are subject to change without notice.
Inglês
Estados Unidos da América
MOSTRAR NOTAS 🔗
TRANSCRIÇÃO 🔗
WEBVTT
00:00:10.410 --> 00:00:12.769
Welcome to Let's Be Frank, the weekly podcast
00:00:12.769 --> 00:00:14.849
that gives a quick take on US stocks from the
00:00:14.849 --> 00:00:17.769
perspective of a value investor. I'm Brian Frank,
00:00:17.890 --> 00:00:20.329
a professional investor with over 20 years experience
00:00:20.329 --> 00:00:22.769
specializing in small and mid -cap value stocks.
00:00:23.350 --> 00:00:25.449
Every week, I'll cover what is working, what
00:00:25.449 --> 00:00:27.589
isn't working, and talk about the value we're
00:00:27.589 --> 00:00:30.190
finding on the hunting trail. Find out more at
00:00:30.190 --> 00:00:33.649
frankfunds .com. Now let's get to it. Today is
00:00:33.649 --> 00:00:37.070
Friday, September 18th, 2026. The Fed raised
00:00:37.070 --> 00:00:39.460
short -term rates this week. while the U .S.
00:00:39.520 --> 00:00:42.439
10 -year bond now yields 5%. But none of these
00:00:42.439 --> 00:00:44.960
events could stop AI investors from again bidding
00:00:44.960 --> 00:00:49.840
the semiconductor ETF, ticker SOXX, up over 7
00:00:49.840 --> 00:00:53.899
% on the week, with Micron, ticker MU, up 12%,
00:00:53.899 --> 00:00:58.700
and Sandisk, ticker SNDK, up 18%. Investors often
00:00:58.700 --> 00:01:01.240
say, I've seen this movie before, for a series
00:01:01.240 --> 00:01:04.349
of events that reminds them of years ago. A long
00:01:04.349 --> 00:01:06.670
career isn't required for this action though,
00:01:07.030 --> 00:01:10.010
as we saw AI infrastructure relentlessly rally
00:01:10.010 --> 00:01:13.609
through June 2026, only to plummet in July as
00:01:13.609 --> 00:01:16.109
leverage unwound. Apparently, investors like
00:01:16.109 --> 00:01:18.090
that movie because we're doing it again here
00:01:18.090 --> 00:01:21.090
in September. However, the actions taken from
00:01:21.090 --> 00:01:24.129
the Frontier Model companies tell me that commoditization
00:01:24.129 --> 00:01:27.209
is very much a risk for AI and all this spending
00:01:27.209 --> 00:01:29.950
assuming high token prices could be off by a
00:01:29.950 --> 00:01:33.500
factor of 10 or more. For now, the party continues
00:01:33.500 --> 00:01:36.420
and the money is flowing from value to growth.
00:01:36.799 --> 00:01:39.439
What worked in value? I have been investing long
00:01:39.439 --> 00:01:41.780
enough to know when value is this out of favor
00:01:41.780 --> 00:01:44.219
and buying feels terrible, it is typically an
00:01:44.219 --> 00:01:47.019
excellent time to buy. The numbers are extremely
00:01:47.019 --> 00:01:50.079
compelling. In my portfolio are companies like
00:01:50.079 --> 00:01:54.019
H &R Block, which pays a 4 .2 % dividend, repurchases
00:01:54.019 --> 00:01:57.000
over 7 % of its shares annually, and is growing
00:01:57.000 --> 00:02:00.939
profits at mid single digits. HRB trades at six
00:02:00.939 --> 00:02:03.640
times next year's earnings per share. That's
00:02:03.640 --> 00:02:06.700
right, a single -digit P -E ratio for a growing
00:02:06.700 --> 00:02:09.659
company. Compare that to Apple, which grows at
00:02:09.659 --> 00:02:12.800
roughly the same rate but trades at over 35 times
00:02:12.800 --> 00:02:16.039
next year's earnings. Value stocks are on sale,
00:02:16.400 --> 00:02:18.419
and buying them at these bargain prices will
00:02:18.419 --> 00:02:21.139
be what worked in value for a long time after
00:02:21.139 --> 00:02:24.360
this cycle turns. What didn't work? Clearly,
00:02:24.460 --> 00:02:26.800
the short -term is against value, so investors'
00:02:27.000 --> 00:02:29.990
patience is being tested. As I mentioned, the
00:02:29.990 --> 00:02:32.629
same trades happened in June of this year with
00:02:32.629 --> 00:02:35.430
AI infrastructure going up while value went down.
00:02:36.129 --> 00:02:38.810
I then called it a black hole. The gravity of
00:02:38.810 --> 00:02:41.370
AI infrastructure is attracting capital away
00:02:41.370 --> 00:02:43.969
from the other stocks. It didn't end well in
00:02:43.969 --> 00:02:46.330
July, and I don't think it will end well this
00:02:46.330 --> 00:02:49.509
time. Until then, though, value is not working.
00:02:49.949 --> 00:02:52.719
Next up is on the hunting trail for value. If
00:02:52.719 --> 00:02:54.819
you're on the hunting trail, know that you can
00:02:54.819 --> 00:02:57.300
leave the trail, put your feet up, and make 5
00:02:57.300 --> 00:03:00.979
% risk -free in the US 10 -year bond. For companies
00:03:00.979 --> 00:03:03.539
that have little to no profits today but are
00:03:03.539 --> 00:03:05.620
expected to grow significantly in the future,
00:03:06.080 --> 00:03:08.319
this higher discount rate means their shares
00:03:08.319 --> 00:03:11.580
should trade lower today. That is not happening,
00:03:11.860 --> 00:03:14.879
and that is the danger I see on the trail. Of
00:03:14.879 --> 00:03:17.240
course, with value stocks trading at very low
00:03:17.240 --> 00:03:19.639
multiples, I think you are being compensated
00:03:19.639 --> 00:03:22.969
for the 5 % risk -free rate. Sticking with the
00:03:22.969 --> 00:03:26.310
H &R Block example, every year that company produces
00:03:26.310 --> 00:03:30.389
about 12 % of its market cap in cash. HRB will
00:03:30.389 --> 00:03:32.650
continue to grow its free cash flow in the next
00:03:32.650 --> 00:03:35.569
10 years, while the US 10 -year you bought today
00:03:35.569 --> 00:03:39.409
will remain at 5%. Know your risk -free hurdle
00:03:39.409 --> 00:03:42.310
rates, and happy hunting this weekend. Wrapping
00:03:42.310 --> 00:03:45.189
up, the AI infrastructure trade kicked back into
00:03:45.189 --> 00:03:47.909
high gear this week, but investors who live through
00:03:47.909 --> 00:03:50.090
this summer know what happens when the trapdoor
00:03:50.090 --> 00:03:53.020
opens. If you let the numbers guide you, there
00:03:53.020 --> 00:03:55.460
is certainly opportunity and value, but it will
00:03:55.460 --> 00:03:57.939
take some guts to avoid the FOMO from the growth
00:03:57.939 --> 00:04:00.759
stocks. Thanks for listening and have a great
00:04:00.759 --> 00:04:03.550
weekend! Performance data quoted represents past
00:04:03.550 --> 00:04:05.870
performance and does not guarantee future results.
00:04:06.349 --> 00:04:08.509
The investment return and principal value of
00:04:08.509 --> 00:04:11.449
an investment will fluctuate so that an investor's
00:04:11.449 --> 00:04:14.430
shares, when redeemed, may be worth more or less
00:04:14.430 --> 00:04:16.149
than their original cost. Current performance
00:04:16.149 --> 00:04:17.930
may be lower or higher than the performance data
00:04:17.930 --> 00:04:20.110
quoted. You may obtain performance data current
00:04:20.110 --> 00:04:22.569
to the most recent month end by calling the Frank
00:04:22.569 --> 00:04:27.810
Value Fund at 1 -888 -217 -5426 or visiting our
00:04:27.810 --> 00:04:31.069
website at frankfunds .com Returns include reinvestment
00:04:31.069 --> 00:04:32.949
of any dividends and capital gain distributions.
00:04:33.470 --> 00:04:37.589
Non -FDIC insured may lose value. No bank guarantee.
00:04:37.949 --> 00:04:40.189
The fund's investment objectives, risks, charges,
00:04:40.329 --> 00:04:42.050
and expenses must be considered carefully before
00:04:42.050 --> 00:04:44.329
investing. The prospectus contains this and other
00:04:44.329 --> 00:04:46.269
important information about the fund, and it
00:04:46.269 --> 00:04:50.470
may be obtained by calling 1 -888 -217 -5426.
00:04:50.769 --> 00:04:52.529
Please read it carefully before you invest or
00:04:52.529 --> 00:04:55.110
send money. This publication does not constitute
00:04:55.110 --> 00:04:58.209
an offer or solicitation of any transaction in
00:04:58.209 --> 00:05:01.000
any securities. Any recommendation contained
00:05:01.000 --> 00:05:03.379
herein may not be suitable for all investors.
00:05:03.860 --> 00:05:05.439
Information contained in this publication has
00:05:05.439 --> 00:05:07.860
been obtained from sources we believe to be reliable,
00:05:08.279 --> 00:05:09.959
but cannot be guaranteed. The information in
00:05:09.959 --> 00:05:11.899
this publication represents the opinions of the
00:05:11.899 --> 00:05:13.480
individual portfolio manager and is not intended
00:05:13.480 --> 00:05:15.579
to be a forecast of future events, a guarantee
00:05:15.579 --> 00:05:18.399
of future results, or investment advice. Also,
00:05:18.720 --> 00:05:20.839
please note that any discussion of the fund's
00:05:20.839 --> 00:05:23.120
holdings, the fund's performance, and the portfolio
00:05:23.120 --> 00:05:25.000
manager's views are as of the recording date
00:05:25.000 --> 00:05:26.560
and are subject to change without notice.
00:00:10.410 --> 00:00:12.769
Welcome to Let's Be Frank, the weekly podcast
00:00:12.769 --> 00:00:14.849
that gives a quick take on US stocks from the
00:00:14.849 --> 00:00:17.769
perspective of a value investor. I'm Brian Frank,
00:00:17.890 --> 00:00:20.329
a professional investor with over 20 years experience
00:00:20.329 --> 00:00:22.769
specializing in small and mid -cap value stocks.
00:00:23.350 --> 00:00:25.449
Every week, I'll cover what is working, what
00:00:25.449 --> 00:00:27.589
isn't working, and talk about the value we're
00:00:27.589 --> 00:00:30.190
finding on the hunting trail. Find out more at
00:00:30.190 --> 00:00:33.649
frankfunds .com. Now let's get to it. Today is
00:00:33.649 --> 00:00:37.070
Friday, September 18th, 2026. The Fed raised
00:00:37.070 --> 00:00:39.460
short -term rates this week. while the U .S.
00:00:39.520 --> 00:00:42.439
10 -year bond now yields 5%. But none of these
00:00:42.439 --> 00:00:44.960
events could stop AI investors from again bidding
00:00:44.960 --> 00:00:49.840
the semiconductor ETF, ticker SOXX, up over 7
00:00:49.840 --> 00:00:53.899
% on the week, with Micron, ticker MU, up 12%,
00:00:53.899 --> 00:00:58.700
and Sandisk, ticker SNDK, up 18%. Investors often
00:00:58.700 --> 00:01:01.240
say, I've seen this movie before, for a series
00:01:01.240 --> 00:01:04.349
of events that reminds them of years ago. A long
00:01:04.349 --> 00:01:06.670
career isn't required for this action though,
00:01:07.030 --> 00:01:10.010
as we saw AI infrastructure relentlessly rally
00:01:10.010 --> 00:01:13.609
through June 2026, only to plummet in July as
00:01:13.609 --> 00:01:16.109
leverage unwound. Apparently, investors like
00:01:16.109 --> 00:01:18.090
that movie because we're doing it again here
00:01:18.090 --> 00:01:21.090
in September. However, the actions taken from
00:01:21.090 --> 00:01:24.129
the Frontier Model companies tell me that commoditization
00:01:24.129 --> 00:01:27.209
is very much a risk for AI and all this spending
00:01:27.209 --> 00:01:29.950
assuming high token prices could be off by a
00:01:29.950 --> 00:01:33.500
factor of 10 or more. For now, the party continues
00:01:33.500 --> 00:01:36.420
and the money is flowing from value to growth.
00:01:36.799 --> 00:01:39.439
What worked in value? I have been investing long
00:01:39.439 --> 00:01:41.780
enough to know when value is this out of favor
00:01:41.780 --> 00:01:44.219
and buying feels terrible, it is typically an
00:01:44.219 --> 00:01:47.019
excellent time to buy. The numbers are extremely
00:01:47.019 --> 00:01:50.079
compelling. In my portfolio are companies like
00:01:50.079 --> 00:01:54.019
H &R Block, which pays a 4 .2 % dividend, repurchases
00:01:54.019 --> 00:01:57.000
over 7 % of its shares annually, and is growing
00:01:57.000 --> 00:02:00.939
profits at mid single digits. HRB trades at six
00:02:00.939 --> 00:02:03.640
times next year's earnings per share. That's
00:02:03.640 --> 00:02:06.700
right, a single -digit P -E ratio for a growing
00:02:06.700 --> 00:02:09.659
company. Compare that to Apple, which grows at
00:02:09.659 --> 00:02:12.800
roughly the same rate but trades at over 35 times
00:02:12.800 --> 00:02:16.039
next year's earnings. Value stocks are on sale,
00:02:16.400 --> 00:02:18.419
and buying them at these bargain prices will
00:02:18.419 --> 00:02:21.139
be what worked in value for a long time after
00:02:21.139 --> 00:02:24.360
this cycle turns. What didn't work? Clearly,
00:02:24.460 --> 00:02:26.800
the short -term is against value, so investors'
00:02:27.000 --> 00:02:29.990
patience is being tested. As I mentioned, the
00:02:29.990 --> 00:02:32.629
same trades happened in June of this year with
00:02:32.629 --> 00:02:35.430
AI infrastructure going up while value went down.
00:02:36.129 --> 00:02:38.810
I then called it a black hole. The gravity of
00:02:38.810 --> 00:02:41.370
AI infrastructure is attracting capital away
00:02:41.370 --> 00:02:43.969
from the other stocks. It didn't end well in
00:02:43.969 --> 00:02:46.330
July, and I don't think it will end well this
00:02:46.330 --> 00:02:49.509
time. Until then, though, value is not working.
00:02:49.949 --> 00:02:52.719
Next up is on the hunting trail for value. If
00:02:52.719 --> 00:02:54.819
you're on the hunting trail, know that you can
00:02:54.819 --> 00:02:57.300
leave the trail, put your feet up, and make 5
00:02:57.300 --> 00:03:00.979
% risk -free in the US 10 -year bond. For companies
00:03:00.979 --> 00:03:03.539
that have little to no profits today but are
00:03:03.539 --> 00:03:05.620
expected to grow significantly in the future,
00:03:06.080 --> 00:03:08.319
this higher discount rate means their shares
00:03:08.319 --> 00:03:11.580
should trade lower today. That is not happening,
00:03:11.860 --> 00:03:14.879
and that is the danger I see on the trail. Of
00:03:14.879 --> 00:03:17.240
course, with value stocks trading at very low
00:03:17.240 --> 00:03:19.639
multiples, I think you are being compensated
00:03:19.639 --> 00:03:22.969
for the 5 % risk -free rate. Sticking with the
00:03:22.969 --> 00:03:26.310
H &R Block example, every year that company produces
00:03:26.310 --> 00:03:30.389
about 12 % of its market cap in cash. HRB will
00:03:30.389 --> 00:03:32.650
continue to grow its free cash flow in the next
00:03:32.650 --> 00:03:35.569
10 years, while the US 10 -year you bought today
00:03:35.569 --> 00:03:39.409
will remain at 5%. Know your risk -free hurdle
00:03:39.409 --> 00:03:42.310
rates, and happy hunting this weekend. Wrapping
00:03:42.310 --> 00:03:45.189
up, the AI infrastructure trade kicked back into
00:03:45.189 --> 00:03:47.909
high gear this week, but investors who live through
00:03:47.909 --> 00:03:50.090
this summer know what happens when the trapdoor
00:03:50.090 --> 00:03:53.020
opens. If you let the numbers guide you, there
00:03:53.020 --> 00:03:55.460
is certainly opportunity and value, but it will
00:03:55.460 --> 00:03:57.939
take some guts to avoid the FOMO from the growth
00:03:57.939 --> 00:04:00.759
stocks. Thanks for listening and have a great
00:04:00.759 --> 00:04:03.550
weekend! Performance data quoted represents past
00:04:03.550 --> 00:04:05.870
performance and does not guarantee future results.
00:04:06.349 --> 00:04:08.509
The investment return and principal value of
00:04:08.509 --> 00:04:11.449
an investment will fluctuate so that an investor's
00:04:11.449 --> 00:04:14.430
shares, when redeemed, may be worth more or less
00:04:14.430 --> 00:04:16.149
than their original cost. Current performance
00:04:16.149 --> 00:04:17.930
may be lower or higher than the performance data
00:04:17.930 --> 00:04:20.110
quoted. You may obtain performance data current
00:04:20.110 --> 00:04:22.569
to the most recent month end by calling the Frank
00:04:22.569 --> 00:04:27.810
Value Fund at 1 -888 -217 -5426 or visiting our
00:04:27.810 --> 00:04:31.069
website at frankfunds .com Returns include reinvestment
00:04:31.069 --> 00:04:32.949
of any dividends and capital gain distributions.
00:04:33.470 --> 00:04:37.589
Non -FDIC insured may lose value. No bank guarantee.
00:04:37.949 --> 00:04:40.189
The fund's investment objectives, risks, charges,
00:04:40.329 --> 00:04:42.050
and expenses must be considered carefully before
00:04:42.050 --> 00:04:44.329
investing. The prospectus contains this and other
00:04:44.329 --> 00:04:46.269
important information about the fund, and it
00:04:46.269 --> 00:04:50.470
may be obtained by calling 1 -888 -217 -5426.
00:04:50.769 --> 00:04:52.529
Please read it carefully before you invest or
00:04:52.529 --> 00:04:55.110
send money. This publication does not constitute
00:04:55.110 --> 00:04:58.209
an offer or solicitation of any transaction in
00:04:58.209 --> 00:05:01.000
any securities. Any recommendation contained
00:05:01.000 --> 00:05:03.379
herein may not be suitable for all investors.
00:05:03.860 --> 00:05:05.439
Information contained in this publication has
00:05:05.439 --> 00:05:07.860
been obtained from sources we believe to be reliable,
00:05:08.279 --> 00:05:09.959
but cannot be guaranteed. The information in
00:05:09.959 --> 00:05:11.899
this publication represents the opinions of the
00:05:11.899 --> 00:05:13.480
individual portfolio manager and is not intended
00:05:13.480 --> 00:05:15.579
to be a forecast of future events, a guarantee
00:05:15.579 --> 00:05:18.399
of future results, or investment advice. Also,
00:05:18.720 --> 00:05:20.839
please note that any discussion of the fund's
00:05:20.839 --> 00:05:23.120
holdings, the fund's performance, and the portfolio
00:05:23.120 --> 00:05:25.000
manager's views are as of the recording date
00:05:25.000 --> 00:05:26.560
and are subject to change without notice.
PESQUISAR EPISÓDIOS PASSADOS
Pesquisar episódios anteriores de Let's Be Frank.
Aviso: O podcast e a arte incorporada nesta página são de Brian Frank, que é propriedade de seu proprietário e não é afiliado ou endossado por Listen Notes, Inc.
EDITAR
Obrigado por ajudar a manter a base de dados dos podcasts atualizada.
