A friend once told me that they only invest in companies that they actively support or purchase products from. I thought it was nothing more than a peculiar idea, but after a few years of investing, I’ll agree that there’s some merit there.
I’ve noticed that, subconsciously, I had taken their advice to a certain extent. I tend to unintentionally avoid investing in companies for certain moral reasons (i.e. British Petroleum, Lockheed Martin) and, rather, lean towards the more exciting and innovative options available (Tesla, Alibaba). Is it really a flawed approach? On the surface, it’s selective for all the wrong reasons and not money-wise in the least. That is, until you evaluate the reasons behind why you’re investing in the first place.
Note that this investment post, much like my ‘Beginners Intro Into the Stock Market’, is not intended to give you pro stock advice. It’s rather intended for the hobby investor, he or she who wants to make a few dollars on the side whilst appreciating the experience in itself. My few years of investing have been especially rewarding, not for the surprising (though modest) gains I’ve made since starting, but for the sheer experience of it. If you reshape your perspective on it, and if you’re not solely serious about only maximizing your profits, you’ll learn a lot about the world and it’s captivating industries, it’s heroes, and its innovation.
If you’re Warren Buffet or someone who’s serious about turning a profit, for sure it’s recommended that all personal motives be cast aside when deciding to dive headfirst into a particular company. You wouldn’t want your stock broker to tell you that they didn’t invest in Apple in its early days because they disagreed with Steve Jobs’ view on animal welfare. However, if you invest as a hobby and appreciate actually learning about the happenings in the world like I do, I highly recommend that you put some weight onto these words. The funny thing is that, regardless of your reasoning, the chances are that you’re already doing this to some extent.
Looking at my portfolio, it’s mainly tied into three industries: tech, solar power & renewable energies, and cannabis. I’m a big fan of Jack Ma’s unreal rise to success after a long history of rejected Harvard University applications (at one point, KFC even rejected him for a job as well). Now he owns Alibaba, as well as my faith in his continued success. Elon Musk just makes things more fun — stability aside, the guy will have your eyes glued to TESLA’s chart every day. Canada’s recent legalization of marijuana had been all the more interesting to follow when you have some of your investment tied into it — it’s especially interesting to observe the trends that take shape and noting the reactionary, touchy-sensitive responses of the market towards legislative procedures.
Then there’s the moral side of it. If you’re like me and you’re interested in the increasingly innovative ways that companies are drawing business due to their green agendas, you’ll actually enjoy reading about the fateful twists and turns of companies like Amyris, a biofuel company offering renewable alternatives to petroleum, which is ironically headed by former BP CEO John Melo.
Ultimately — you don’t have to only chase the dollar. In addition, you can also look towards industries that interest you and that you have a keen inclination to learn about. On a practical level, you can easily become much more knowledgeable than a stock broker who is providing their best guess based on patterns or intangibles such as leadership, management, etc., whereas you may eventually develop an expert opinion on whether a certain company breaking into a certain industry can tread water or not. A few weeks worth of research into, say driver-assistance systems technology for instance, will give you a sharp eye to scrutinize the true prospects of a company entering this field. In other words, why not learn a lot about fields that interest you and that you have your investment tied up in rather than knowing little about a number of industries that don’t attract your attention to begin with.
How cool is it to have a Tesla roadster currently floating in space knowing that you own a small piece of the subsidiary company that sent it there? Or investing in exoskeletons before people realize that they’re actually a common thing? Or contributing to the spread of affordable solar panel technology/aspiring innovations of renewable biofuels? Or even just supporting Jack Ma because he’s Jack Ma and he has a pitifully riveting success story.