Even an adequate civilization still needs stock pickers. (If everyone invests in index funds, who sets the stock prices?) But they probably wouldn’t still be resolving conflicts by throwing bombs at each other for months/years on end or by trying to starve or freeze each other into submission, or shut down nuclear power plants in the middle of an energy crisis...
If everyone invests in index funds, who sets the stock prices?
Large firms and professionals who work together full time to pool and analyze the best information. Stock picking is a bet that civilization is so inadequate that you can beat the large amount of capital, time and expertise that go into these firms.
My current view (having updated a bunch of times) is that it actually is pretty hard to beat the professionals by stockpicking, or in other words, the opportunities are more limited than I thought. Looking back, what has worked for me basically fall into 2 categories:
A sudden influx of “dumb money” (e.g., caused by government stimulus checks) overwhelms the “smart money” and leaves a lot of assets mispriced.
ESG concerns make certain asset classes uninvestable for the professionals.
(And then there was my COVID bet back in Feb 2000 which worked out really well, which I’m not sure how to account for. Although that was more of a macro bet than stockpicking.)
So my portfolio is really concentrated into anti-ESG bets at the moment, hence this post asking for other ideas.
I mean, isn’t stock picking in general a bet against civilizational adequacy?
Even an adequate civilization still needs stock pickers. (If everyone invests in index funds, who sets the stock prices?) But they probably wouldn’t still be resolving conflicts by throwing bombs at each other for months/years on end or by trying to starve or freeze each other into submission, or shut down nuclear power plants in the middle of an energy crisis...
Large firms and professionals who work together full time to pool and analyze the best information. Stock picking is a bet that civilization is so inadequate that you can beat the large amount of capital, time and expertise that go into these firms.
My current view (having updated a bunch of times) is that it actually is pretty hard to beat the professionals by stockpicking, or in other words, the opportunities are more limited than I thought. Looking back, what has worked for me basically fall into 2 categories:
A sudden influx of “dumb money” (e.g., caused by government stimulus checks) overwhelms the “smart money” and leaves a lot of assets mispriced.
ESG concerns make certain asset classes uninvestable for the professionals.
(And then there was my COVID bet back in Feb 2000 which worked out really well, which I’m not sure how to account for. Although that was more of a macro bet than stockpicking.)
So my portfolio is really concentrated into anti-ESG bets at the moment, hence this post asking for other ideas.
What stocks are in your non-ESG portfolio?
PBR-A, EGY, BTU, ARCH, AMR, SMR.AX, YAL.AX (probably not a good time to enter this last one) (Not investment advice, etc.)