Thought question: what would you invest in?

[dmaze]

Pretend you're running a mutual fund. You have lots of other people's money to play with. While they'll be sad if they lose it, fundamentally you've told them up front what your investment strategy is. ("I invest only in IPOs and plan to sell everything within 6 months" is legit, even if there's a substantial chance they'll tank; "I buy a controlling share of Microsoft common stock" isn't realistic; "I buy consumer debt" or "I buy houses in expensive urban areas" is; less glamorously, "I buy government bonds" is also a fine answer.)

What do you invest in, and why?

Comments

[plymouth.livejournal.com]

I'd invest in lots of companies working on environmentally-friendly tech (wind power, electric cars, green computers, hemp farming - things like that). Because I think it's a growing sector and because I WANT it to be a growing sector and investing in it is one way to make that happen.

[tla]

This is basically what hedge funds are all about. I haven't given it much thought, because I work with too many people who have, but shorting certain sectors of the housing market (and going long on others) is something that I can think of off the top of my head.

What's my goal?

[chenoameg.livejournal.com]

If I don't care if the value of the portfolio goes up or down, then I would want to use the money to change the world. Plan A: I would come up with a set of standards measuring how companies:
- treat their employees
- plan for environmental sustainability
- perform ethical recordkeeping
- have sensible policies about how/if they deal with non-democratic governments
and some other criteria I haven't thought of yet.
In other words I would try to increase the stock price of companies that I thought were good citizens.

Plan B: I could try to get enough of a share of badly behaving companies to get issues voted at their annual meeting. Plan C: invest in companies that are being run according to competent honest economic principles in developing countries. Plan D: become a major provider of microloans in one or more developing countries.

If my goal is to have an increasing share value over the next fifty years, I would seek out competently run companies whose products will be favored with increase global warming because I think that's a current inefficiency in the market (I think that I believe in global warming more than the market makers, and I think I'm more right than they are.) The other thing that I think is being under exploited in the American stock market currently is a paradigm shift that is upon us. Stuff is cheap and labor is expensive. One hundred years ago it was exactly the opposite, and many of our culural values are based on that idea. Even with the likelyhood of recessions in our future I don't think it's going to go back. We haven't changed our points of view to catch up with that reality (we still determine our value by our stuff, for example). I'm not sure what direction that change will take, but I think there's something to exploit there.

Why don't I do any of these things with my current portfolio? I don't do Plans C or D because of the high risk of currency & government fluxuations devaluing the investment. I don't do Plan B because I don't have enough clout to change companies by myself. I don't do Plan A or the last two plans because I consider it too much research for the amount of money I'm investing.

What triggered this thought question?

Re: What's my goal?

[firstfrost.livejournal.com]

- perform ethical recordkeeping

Does this mean "they don't embezzle" or is there some sort of proactive ethics one does with recordkeeping? (Affirmative action for all those 8s and 9s that are discriminated against in today's numbers!)

Re: What's my goal?

[chenoameg.livejournal.com]

It means I wasn't very articulate yesterday. Ethical accounting would have been better, some other description would be better still.

I was thinking:

- doesn't embezzle
- doesn't create paper cooperations to hide losses or invent gains
- didn't do that sort of thing before the new federal legislation (Sarbane/Oxley except I don't know how the names are spelled) that the legistlation outlaws.

[fredrickegerman.livejournal.com]

I do a whole lot more research than I can do as someone who doesn't run mutual funds for a living. Come ask me when I'm done with that bit. :-)