Investing is an art which is like shooting in the dark. In olden times when data availability was rare, some would browse through whole lot of data and probably pick up stocks based on Dividends, growth etc. or even rare cases PE, as price was dictated by a few.
Investing today gives you crazy amount of data and data crunchers and now AI has put in its hat.
Screeners put out what top traders look into before investing and you can get their typ of stocks, be it value investing or momentum investing or a peter lynch portfolio or RJ OR WB type portfolio.
But investing should be fun and not like running on a treadmill looking to make more money. It may fail. You need luck to pick up a Titan or Coke or an Amex or even an MRF type of companies and invest hugely in them to make money.
This brings us to Conviction or themes that one must have and stick to it unless some major regulatory or market related changes has up ended it. At least you would not regret if one theme fails as other theme could do bette.
My themes are as follows: I may not invest big but at different times try to do a $ cost average.
These themes are
a) i feel medical business is going to do well as people eating, working habits are becoming more bench oriented (ordering and watching it on tv. Eating while working etc. etc). Thus my conviction is medical facilities and pharma will do well in future. Add to it corporatitization of hospitals.
b) The second theme is on Waste management. As we increase the footprint of garbage (be it delivery based packing of goods, food delivery or any purchases), the plastic and wastes are going to pile and you need companies to convert them to useful products.
c) The third theme is based partly on b. We abuse resources and as flooding in chennai during heavy rains showed, most of the lakes are converted to buildings and with climate change over time many of the coastal cities will be under water. Thus clean water is going to be required in future and such companies
d) As we collect more and more data, the storage is going to increase and so does computing. This requires huge amount of cloud storage and thus the heat generated needs to be cooled. ACs and electrical equipments will be in demand in future.
e) And to run d) we will need a lot of power and power equipments. Thus this is my theme - power (whatever means) generation and transmission.
f) Finally, my last ones will be with lots of Social Media, the need to look good, different is there. Thus fashion and beauty products is also my theme.
Of course, you have, Banking and fin. sectors, infra, FMCG, AI replacement, employment agencies theme etc. and other different themes and you have to choose and invest in them slowly and hope one of your themes becomes a multi bagger.
The key thing is not to loose your conviction in your themes. There may be bad times or good times for companies, but if your conviction is good on the themes, it will do well in the long run.
Like someone had a conviction in Zomato- a) people want to relax at home and eat and watch movies/programs at home and not be bothered of traffic, parking, weather etc. b) Kirana shops open around 10 AM to 8 PM and then close.So there is an exclusive market for it from 8 PM to next day 10 AM where you can get what you want by ordering in 10 -30 mins. Thus if somebody had conviction in Zomato they would have invested and even though initial loss making to make the model and scale it up may take time.
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