As I've finally started working full time again, I'm trying to develop an investing strategy that works for me moving forward. Because I've been fairly good with my own trades and finances over the last several years I decided to continue managing my own portfolio for now.
Currently, here is my strategy for investing in companies. It's really just a 3-step process:
1) What is likely to become cheaper and experience innovation in the coming years? Example answer: Energy (innovations in sustainable green energy). Here, I'm pricing in future expectations - say, 10 years from now.
2) As the above becomes cheaper, which industries are likely to improve efficiency and profit margins? Example answer: lighting
3) Research: Which established companies are positioned well in the above industry to take advantage of cheaper resources: Exmaple answer: LSI Industries
The importance here is for me not to invest in things that are likely to get LESS expensive, but invest in companies and industries that are likely to PROFIT from things getting cheaper.
Another example:
1) Weed/psilocybin becomes cheaper + less regulation
2) Companies that use these commodities in products
3) Research mental health services, and wide-ranging companies that USE marijuana, not companies that purely grow it. Example: Aurora Cannabis - 99% down from the highs, and sells indoor cultivation systems in addition to selling cannabis products. Selling cultivation systems is like investing in the shovel.
A bad example (yes, I'm going to trash Bitcoin again):
1) Energy becomes cheaper over time
2) Proof of work cryptocurrencies?
3) No longer unique, no longer hard to acquire. Many 'greener' options flood the market, increasing the supply of cryptocurrencies endlessly. Crypto does NOT have a finite supply because infinitely new cryptocurrencies can be created. As energy becomes cheaper, it becomes cheaper to make new cryptocurrencies. Although Bitcoin supply is low, miners may be able to sell at lower prices once it becomes much cheaper to mine. From the demand side, the market may not be willing to purchase Bitcoin at higher prices, leading me to believe there is a decent chance it never makes a significant new high above $69k.
Now, looking at the chart for LSI industries, I have marked a couple resistance levels and a major support trendline, with major horizontal support around $5. Currently, the asset has been experiencing slow growth, but I think there is a possibility it enters a period of accelerated growth, due to decades of consolidation. Walking around New York City, I've also noticed the importance of lighting, and how it's changed over the last several years.
Let's see what happens! If LYTS breaks below the rising support and particularly the $5 level, the trend could look a little more concerning.
This is meant for speculation and entertainment only! Here I am documenting my own strategy. Let's see if it has any merit.
-Victor Cobra
Currently, here is my strategy for investing in companies. It's really just a 3-step process:
1) What is likely to become cheaper and experience innovation in the coming years? Example answer: Energy (innovations in sustainable green energy). Here, I'm pricing in future expectations - say, 10 years from now.
2) As the above becomes cheaper, which industries are likely to improve efficiency and profit margins? Example answer: lighting
3) Research: Which established companies are positioned well in the above industry to take advantage of cheaper resources: Exmaple answer: LSI Industries
The importance here is for me not to invest in things that are likely to get LESS expensive, but invest in companies and industries that are likely to PROFIT from things getting cheaper.
Another example:
1) Weed/psilocybin becomes cheaper + less regulation
2) Companies that use these commodities in products
3) Research mental health services, and wide-ranging companies that USE marijuana, not companies that purely grow it. Example: Aurora Cannabis - 99% down from the highs, and sells indoor cultivation systems in addition to selling cannabis products. Selling cultivation systems is like investing in the shovel.
A bad example (yes, I'm going to trash Bitcoin again):
1) Energy becomes cheaper over time
2) Proof of work cryptocurrencies?
3) No longer unique, no longer hard to acquire. Many 'greener' options flood the market, increasing the supply of cryptocurrencies endlessly. Crypto does NOT have a finite supply because infinitely new cryptocurrencies can be created. As energy becomes cheaper, it becomes cheaper to make new cryptocurrencies. Although Bitcoin supply is low, miners may be able to sell at lower prices once it becomes much cheaper to mine. From the demand side, the market may not be willing to purchase Bitcoin at higher prices, leading me to believe there is a decent chance it never makes a significant new high above $69k.
Now, looking at the chart for LSI industries, I have marked a couple resistance levels and a major support trendline, with major horizontal support around $5. Currently, the asset has been experiencing slow growth, but I think there is a possibility it enters a period of accelerated growth, due to decades of consolidation. Walking around New York City, I've also noticed the importance of lighting, and how it's changed over the last several years.
Let's see what happens! If LYTS breaks below the rising support and particularly the $5 level, the trend could look a little more concerning.
This is meant for speculation and entertainment only! Here I am documenting my own strategy. Let's see if it has any merit.
-Victor Cobra
