Diversified Bullish

An Investing and Stocks Blog

Aug 28, 2022

Industry-Based Investing

When picking investments, I like the idea of selecting assets based on their industry or the rise of a specific technology. One can observe the world, watch trends come and go and consider adding them to your portfolio.

For example, I believe that solar technology is likely to be an important source of energy in the future. I am basing this thesis on an anecdotal conversation with an energy engineer, along with generally positive sentiment for the solar energy industry as of late. For these reasons, I am marginally invested and building a position in a solar company, Sunrun.

Electric vehicles are another industry that I believe will play a big part in the future of humanity, so I'm holding Tesla. It's been my best investment by far. I'm still holding because I believe that electric vehicles are going to be huge in the future. One can hold a company based on principle, provided the quarterly earnings reports are acceptable.

Sometimes your thesis will be wrong. You can't win 'em all. You also don't need to win them all. Pick a few winners and mix with index funds to round out your portfolio and the 80\20 rule will emerge. A few of your assets will perform better than the others and reap most of your gains.

I think that this industry-based line of thinking is a way to frame your investments that can make it easy to remember why you're holding it. One can certainly be wrong about our projections into the future, but these are the types of angles a keen investor seeks out.