It is true that social media companies have given huge return to investors. But is it time to think beyond just profit or return on Capital? Should investors demand more on how this companies manages its content? This is where ESG and impact investing can stretch its muscles. However, there are few obstacles in the way. And one in particular, incentive. It is hard to shift investors from profit. Ultimately, every investor is participating in…
Passive investing has never been popular. This presents us with unforeseen challenges and also opportunities, especially in the ESG and Impact investing area. We are here to discuss the opportunities. The financial market allows capital to be flown to the areas where it is needed. Given the current conditions of environmental damage and social inequality, our society is requiring more capital to be allocated to these areas. Unfortunately, these areas don’t yield monetary profit, yet…
Imagine a government has passed a law where it has made it possible to charge any person with a crime as long as he/she speaks against the government. Even though this statement is a highly simplified version of the law, the impact this law will have on the freedom of the people is unmeasurable. Many of the other nation’s leaders could speak out against this reach of power, it is highly unlikely that that government…
It is reasonable to feel like walking with a blindfold in a desert looking for water (yield) during these uncertain times. Hence, I recommend the following principles and a strategy for investing during COVID 19 outbreak. Principles to adopt Being a value investor or a long term investor requires one to adopt an optimistic outlook. Though too much optimism can blind one’s judgment, it is essential for an investor to believe that the world will…
Focus on what you can control rather and things that are out of control. Impact investing principal can be applied to general daily life choices. Choosing actions that can give the best impact going forward, not only monetary impact but mental and well being of yourself and along with the community. Things you can control are: usage time on reading news, choosing rumor over facts, most importantly your reaction to this current world state. Either…
Though it may be premature to define the coronavirus effect in modern times a crisis, it is certainly heading that direction the longer it’s spread continues. During this time, it is important to focus on things that we appreciate. Here is a brief list: – Utility companies. Without these people doing their job, I can’t imagine how worse this quarantine situation can be – Trucking and food transportation company. Though the majority of the economic…
When Mr. Market is panicking, the worst mistake an investor can do is follow along. When the market is in a sell off and every one is losing money left and right, it is crucial for an investor not to panick sell. However, it is easier to give into ideas that are strengthened by emotions. Hence, here are some quick useful thoughts to keep in mind during this time: – Remember that you control your…
It is definitely a risky environment to invest your capital. The fear of coronavirus spread has already impacted business earnings. Given China’s economy has quite a strong influence in the most populated part of the globe, it is a fearful time for everyone. This will ultimately impact the capital flows being distributed to the most productive parts of the economy of the world; hence, the expected return on equity will be hit the hardest. If…
Adam Smith pinned the seed of modern capitalism. The world has seen a great advancement in technology and prosperity since. Though his theory is not the only reason for these results, it was the center of the wealth creation of nations today. And that seed has been nourished by many different economic theories and expansions; such as the Keynesian, Friedman, and most recently by behavioral economic theories. However, all these theories have valued growth by…
We are in the midst of the longest stock market expansion and these have prompted many experts and investors to speculate when will we see it to “take a break” or even crash. There are multiple reasons for these 10+ years of bull market, but my conjecture is that the index fund has played a major role. There are many advantages in index fund investing over actively managed funds; low management fees and time tested…
