Monday, March 17, 2008

Investing and Not Investing on Ideas

A few weeks back, I sat down with a co-worker and we chatting about our investing principles. I gave my ideas and he shared his perspective that I thought quite interesting. He talked about investing by trends that he believe will be prevalent in the future. One example was Europe with it's expanding economy will be in a situation where people will be more wealthy and as a result, will indulge more. One consequence on that indulgence is that europe will as a country become more obese and as a result, diabetes might become more widespread. As a result, the idea is to invest in stocks that combat diabetes and encourage weight loss.

So let's take it on step further, what not to invest in. Well, gas is going crazy because of the weaker dollar (because of rate drops) and as a result, everyone is being squeezed. People will drive less, go out less and be more picky where to spend their dollars. I think restaurants, travel, gas and luxury commodity will suffer as a result. So the idea is to hold off on the Starbucks, Jamba Juices, Airline companies... you get the idea.

Interesting perspective huh?