More
than idle conversation
It is always
emotionally rewarding to synchronize one's personal values with their
investment portfolio's structure.
Generating competitive returns need not be divorced from "doing
good" at the same time.
As many of my readers know, morals-based (altruistic)
and socially responsible investing has frequently been an accompanying
objective to my quantitative orientation regarding the financial markets. During a nearly four-decades long practice, I
have created proprietary stochastic integers and statistical analysis to craft
various target-specific strategies such as Health
and Life Sciences, Alternative Energy, Fixed
Income and current offerings in Global
Water Concepts and Global Agriculture Solutions. The
filter of socially conscious investing aligns clients to portions of their
portfolio with specific areas of interest and concern.
But far from
relinquishing the opportunity for capital gains, these segregated silos have
performed at an extraordinary pace during the past generation. Target oriented portfolios help the investor
to define his goals while also contributing to the welfare of the planet. The niches are too numerous to calibrate and
widening in scope each decade.
Evolutionary shifts in
demand for skill sets and natural resources are durable, and impactful upon
research and development (R&D), capital expenditures, and profitability for
a wide array of industries and geographies.
These trends are also
affecting global investment cycles that emanate from a changing demographics of
demand and need. The most significant of
these shifts is population displacement
due to politics, weather, or economics.
Beyond their
application to the financial markets, population trends also influence overall
consumer confidence in private sector business, as well as government. As pressures mount to find new sources of
natural resources, so too does the fear of poor health, malnutrition, housing
shortages, and physical security.
Despite Wall Street's opportunism about product creation from these
distresses, the outside world watches with dismay as human convoys become
statistics for heartbreak and misfortune.
The financial markets
look at supply and demand/excess and shortage in the context of a profit-sum
game, while the rest of the world sees human dislocation as a trauma beyond
comprehension.
Do
whatever you must
A significant portion of
my stochastic data is lined up at present for a secular/generational opportunity
to seek out solutions to these issues through socially responsible investing. Additionally, we believe the prospect to
create portfolio alpha in these sectors is rounding into its maximum phase. Commodities like food, oil, metals, arable
farmland, water, wood, etc. are inextricably linked to the human condition, as
well as defining how their use helps to shape our perceptions about the role of
good corporate and governmental stewardship of our ideals. Rising interest rates, along with price
inflation in soy, corn, wheat, coffee, poultry, dairy, and fruits could propel a
new era of demand-driven economic growth for the next decade and beyond.
Compounding the potential
shortages in raw materials and foodstuffs is a drop-off in available
inventories in places that need them most .
Harvests around the globe are actually at record levels, but consumption
rates vary widely by geography. We need
better storage, delivery, and production efficiencies to ensure that product is
getting to those whose lives depend upon it.
These are the kind of questions patrons should be asking when looking
for "shiny new opportunity hype".
Today, with the
attention span of a nanosecond, investors possibly might finally be getting the
message that secular, long-term shifts are
occurring and, potentially, be the place for a few of their investment assets.
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