Ask HN: If you had millions to invest, what sectors would you bet on?
Heyo,
I am genuinely curious to hear what sector(s) HN readers are currently interested in. Assuming you had a large amount of capital and you were allowed to only bet on 1 sector for the next say 5-10 years, what sector would you put your capital into? and what innovation(s) are you currently seeing within said sector that makes you excited about it?
Cheers
74 comments
[ 1.8 ms ] story [ 151 ms ] thread9 "Superinvestors" all using the same method of evaluating crushed the market for over 30 years straight. That's mathematically improbably to the highest degree.
https://www.investopedia.com/articles/investing/030916/buffe...
Or therapeutic psychedelics
in practice I've sold most of my index position for MCD, as the VIX (mean volatility) is trending high. Even if you're right about the sector, it's virtually impossible to predict which company will come out on top.
Other than that, Biomedical and aerospace.
Even in the West, there are some areas that have not yet been gentrified. In Portugal, real estate in Lisbon has already gone up quite a bit, but less so in Porto.
In Italy, much of Sicily is interesting to speculate on. Again, one is speculating on the notion that politics will become more stable, and crime will come under better control, allowing property values to rise.
https://en.wikipedia.org/wiki/Chernozem
This can also backfire on a more coordinated scale, for example see what the communists did in post WW2 Warsaw: https://en.m.wikipedia.org/wiki/Bierut_Decree
Those cases are still dragging on in (now fair) courts of Poland. And you can't honestly blame Bierut for doing this - the capital was so devastated that there were less than few thousand people living in it (down from like 1mil before WW2). In fact one of the problems with those pre-WW2 titles is that they often intersect multiple properties across streets, because due to the extent of city damage the street layout was re-architected (if you're starting from almost zero, why not rewire the fundamentals?).
Buy a whole-market index. As Buffet says, don't try to find the needle-- own the haystack.
It used to be that the best teachers were available only to a few dozens of privileged students at a time. But now we have the technology to scale great pedagogy to reach millions of learners. I also think we ought to move from a push model of education to a pull model, i.e., learners get to pick and choose from a selection of good teachers and progress through various levels at their own pace (and get accredited for their learning). Classroom learning really ought to go or be reduced to very special cases. That we all have to be synchronized on when we are prepared to learn a topic is an outdated concept.
MOOCs are an excellent step in this direction, but we really should be doing more. In education, I think we're in a stage similar to where internet search was before google or smart phones were before iphone.
It's ridiculously easy to sign up, so a a lot of low intent people sign up, but these people would never have enrolled in a college for the class and probably didn't plan to actually do the entire course.
It's true that only a fraction of those who participate in typical MOOCs complete them (8 - 10%), (https://imgur.com/a/HI4IXbt , from "HarvardX and MITx: Four Years of Open Online Courses", https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2889436), but a significant fraction (~15-20%) also explore these courses (i.e., they watch 50% or more of lectures). So this means that the MOOCs are reaching around 20-30% of the participants in some significant manner.
First of all, is the larger drop out rates really a problem? I'd argue that the option to drop out of a course if you feel that it doesn't serve your needs right now is itself valuable. This means that you're free to spend your time in ways that are more useful to you. Also, a large number of those taking the MOOCs are themselves teachers. This means that the high quality of pedagogy that MOOCs can deliver will have cascading effects through educators who use them to upgrade their own skills.
How to improve the effectiveness of MOOCs? There are plenty of things we can do, too many in fact to go into in one post. A few keys areas that I can see are (a) pedagogy (finding great teaching talent and professionally beefing up their performance), (b) affordability (an issue in developing countries primarily), (c) formal accreditation, and (d) a wider selection of courses that form a genuine alternative to the standard university programs. Models that I find incredibly exciting are that of India's IGNOU (https://en.wikipedia.org/wiki/Indira_Gandhi_National_Open_Un...), NPTEL (https://nptel.ac.in/), and Swayam (https://swayam.gov.in/), all of which issue officially recognized certificates. But unfortunately, as with many things that the Government of India does, the intentions are noble but the execution is mediocre. There's clearly room for players who will "full-ass" what IGNOU set out to do.
Crypto, marijuana, self-driving, take your pick: you could totally nail the sector choice and still lose a lot of money if you make a wrong bet. Trade carefully, and diversify...
You can help out animals and the environment and make money at the same time.
Health issues aside the planet can’t support 8 billion people eating like that so practical concerns alone will drive demand for alternatives.
I agree that Keto and Carnivore diet are underesearched, but blood reports have also shown very positive on quite a number of people, but most people test after a few weeks rather than 6 months.
The theory is that it takes the body a while to adapt to anything -- esp. when you've been stuffing your food with carbs for most of your life.
I'm 3 months in on Keto, planning on taking blood tests in another 3 months -- I'm not taking it likely, I've been vegan after a lot of research as well -- but there are many flaws in the vegan argument.
We haven't spent any time trying to solve the problem of 8 billion eating like that, we're pushing the other direction, and it quite well is causing HUGE amounts of health problems. So, I don't know that it's a real choice.
Some huge companies like Tyson are also making significant investments in this area.
https://www.washingtonpost.com/opinions/has-the-impossible-b...
At the same time, US government deficits are setting records highs for peacetime.
And it's not just the US, with other major economies like China and Japan also racking up public and private debt at astonishing rates not seen outside of war economies.
This is essentially a trade-off between juicing current GDP growth at the expense of long-term stability of price levels and ability to respond to inevitable crisis.
It's impossible to predict what will happen or when, but if the probability of economic catastrophe increases, the value of precious metals, real estate and the largest, most stable cryptocurrencies should increase.
Sorta. It stabilized around 2013.
https://fred.stlouisfed.org/series/GFDEGDQ188S
The deficit for the first four months of the current fiscal year increased 77% compared with the prior fiscal year.
Revenues fell by 2 percent to $1.1 trillion, while spending rose 9 percent to $1.4 trillion.
Source: https://www.bloomberg.com/news/articles/2019-03-05/u-s-budge...
All this during peacetime and economic expansion. What will this look like in non-ideal conditions of war or economic recession?
My point is that fiscal recklessness will increase as the Federal Reserve becomes more politicized. This will make the economic system more fragile and raise the probability of a catastrophe.
When the odds of financial catastrophe increase, the rational response is to allocate more capital to precious metals, real estate and two or three cryptocurrencies with the greatest hash power.
No, it shows debt as a percent of GDP. The idea is to normalize debt so the numbers are more meaningful. Context is everything.
> Revenues fell by 2 percent to $1.1 trillion, while spending rose 9 percent to $1.4 trillion.
I'm not especially concerned if also GDP went up, but the data's not out, yet.
> What will this look like in non-ideal conditions of war or economic recession?
See 2008-2015? That. That should worry you.
Also fun: https://www.google.com/publicdata/explore?ds=ds22a34krhq5p_&...
* Gold is in its 6th year of a bear market. * The stock market is in its 10th year of its bull market.
People are getting poorer and moving towards renting and condos.
1. Urbanization
More than 60% of the world population will live in cities and existing cities will become bigger ceteris paribus. I could write a thesis on this but you need to think very broadly about this. A lot of unicorns are playing in this space think Uber, instacart, Zillow etc
2. Global Southern shift Basically demographic and economic centre of activity is shifting to global South. This is different from southern hemisphere. Pretty much any business focusing on consumption sector in these areas is a good bet. Think FMCG FMEG
3. Ultratrend - climate change Climate change will play havoc with so many layers of our economic systems. While most people think agriculture, you can also add transportation, manufacturing, renewable energy, reinsurance, fishing, textiles, pharmaceuticals
Any solution that is climate defensible is gold
4.Technology breakthrough
Here an IP defensible stack with a focus a sector or niche in above 4 areas would be a force multiplier.
Here I guess basic framework could be data + operational expertise + combo{ML, AI, serverless computing.. }
Chemical companies could be an interesting bet. There is a lot of work happening in using AI for molecule discovery, process discovery. Any company which cracks this will be the Google of "atoms"
I'm more and more convinced we will see a reversal here. My guess is this: society as a whole will eventually reject the idea that they should be burdened with a massive expensive infrastructure just to have people sit in offices in centralized locations, staring at screens and doing the same job they could do from their homes. Or that shops need to be in centralized locations. Roads, railways, brick and mortar shops will all be gone and replaced with rural settlements in natural surroundings and virtual "travel" (VR) for the most part, air travel (drones, helicopters, flying cars) for the cases when absolutely necessary (transport of goods). It will probably be a gradual, but accelerating process as the bits fall into place.
So no, I don't believe urbanization is a good bet, not even in the medium term at least not in developed countries. Goods and services that support the above scenario on the other hand ...
It's no doubt a very challenging space, given the regulations and liability issues, but the sheer size makes it all the more important