My Investment Strategy & Themes

I think about investment in very broad terms. That is to say that I think holistically about my entire life in terms of “asset management” and investment performance and returns. After all, in the final analysis it’s not just monetary gains and our financial assets, but our life portfolio that matters most. This life portfolio management concept considers time and talent (and not just money) as investment capital. By extension, experiences and achievements can be considered as assets (and stores of value), just as are stocks, real estate or precious metals.  Much of this has coalesced into a simple list of personal principles. Having said that, what follows is mostly about financial investment.

Income As ReturnsMan Lake Mountains View

There’s a commonly held notion that income can be categorized into three different types. The first of these is earned income, being the income derived from a job (trading time for money). This is the most common yet least scalable, because one cannot trade in more than their own available waking hours. 

The second income type is so-called passive income which derives from revenue-generating assets such as real estate or a business with positive cash flow. The term “passive” here is a bit of a misnomer since these income sources certainly require active effort to build up or manage. 

Finally, the third type is referred to as portfolio income. This typically comes from bond yields, dividends or proceeds from stock or derivatives trading in a traditional investment portfolio. These assets are usually fungible, exchange-traded instruments but could be any kind of standardized financial products.

I see the distinction between “portfolio” and “passive” income as having less to do with the type of asset, and more to do with whether you built it or bought it.

I see the distinction of portfolio versus passive income as having less to do with the type of asset, and more with whether you built it or bought it. In my view, portfolio income comes from investments that one simply bought into (like a company’s stock or a hedge fund) which someone else, therefore, will manage (like the CEO or fund manager). But all of these income types should be considered as part of the investment mix, including one’s job (since time is the most precious asset we have to invest).

Desk Computer NotesTime Valuation

Part of the reason for viewing these holistically is the single, immutable and universally acknowledged factor critical to having any of these income sources: time. Without time (to trade away in the first case, build up in the second or research in the third) then none of these income sources or investment returns are possible. This is why time valuation and management has become a cornerstone of my investment framework. 

This concept is viewed among institutional investors as “opportunity cost”, which is the loss associated with opportunities not taken because other, less profitable investments were made instead. Put simply, you can’t be everywhere at once. But there are ways to utilize both the expertise and resources of others to maximize our desired outcomes.

Fast-Follow Investing

I am generally a careful and cautious person. So, when it comes to my investments and my full life portfolio, diversification and risk reduction are just as important as maximizing gains. I achieve this, in part, by applying my ‘income as returns’ framework above. However, true diversification is not possible without a sufficient number and variety of investable ideas. 

I know I know very little (even though I sometimes think I’m clever). So ongoing learning and ideation is just as important as physical fitness and a healthy diet. But even this is not enough. We can have all sorts of ideas based on personal experience, acquired knowledge or the guy next door. But both our range of ideas and our ability to objectively assess them is limited by our biases and perceptions, not to mention those few waking hours we all have. And how many business ideas or investment themes could we actually execute on if we had to do everything ourselves?People Whiteboard Meeting

By modelling successful investors and traders, and tapping into the ocean of readily accessible information and research around us, we don’t have to do it ourselves. And, thanks to major innovations in the retail investment space, it has never been easier to leverage the skills and scale of others in order to magnify our own investment returns.

Predictions and Confirmations

There are a variety of fundamental and technical indicators that I track or reference in order to filter or reinforce my investment ideas. Here are two…

The AAII Sentiment Survey is a useful investor sentiment tracker, especially helpful for identifying reversals. One contrarian signal that some use is if the % bullish minus the % bearish is 20 or more, it is a is a bullish signal for stocks 6 months out.

When the futures on the VIX (which measures the degree to which investors are buying insurance on their portfolios) front month contract is above the contract 4 month out, it indicates significantly higher short-term fear in the market. This is an infrequent occurrence (it happened less than 10 times since 2009) but is a strong indicator that a market bottom may be at hand.

These data-driven indicators are two of the potentially useful and freely available measures of market and economic sentiment, and can help reinforce more sector-specific investment ideas and research.

 Investment Themes I Follow

These ideas are some of the components or building blocks of my investment strategy. My investments themselves cover a broad range of areas. As suggested above, it’s hard (and foolish) not to use our subject-matter expertise in a given industry or area if investment opportunities present themselves. 

Money Cat

So it is with me and financial technology (fintech), enterprise SaaS solutions and digital marketing. SaaS is less a sector or theme in itself and more a product type. Regardless, these are areas where I have professional knowledge, and also already have investments. 

You will note that these are among the two dozen plus themes listed below. Of the full list I have only done the requisite research on some. After the deep dive, they stay on the list only if I formulate a workable investment thesis (decide I want to invest).

When and how I actually put on a position is a separate matter. I currently have trades on in some of these and not yet for others. Either the chosen instrument has not yet reached its price target, or I am still in the screening phase or monitoring the broader sector performance.

Like my research and investment strategy (and me), this list is a work in progress. But I will continue to share changes and updates, as appropriate.


Mega-trends/sectors and related investment themes I’m focused on…

Advancement of Technology – 3D Printing
Advancement of Technology – AI and Machine Learning
Advancement of Technology – AR / VR Technology
Advancement of Technology – Automation & Robotics
Advancement of Technology – Blockchain Technology

Advancement of Technology – Industrial Materials Alternatives
Advancement of Technology – IoT / Smart Home

Communications & Media – Communications Svcs / Telecom
Communications & Media – Cyber Security & Privacy
Communications & Media – Digital Media & Marketing
Communications & Media – Streaming & Cable Cutting
Energy Alternatives – Utilities & Grid Tech
Energy Alternatives – Energy Storage & Battery Tech
Energy Alternatives – Renewable & Alternative Energy
Evolution of Markets – Brokerage & Finance
Evolution of Markets – Cashless & Mobile Payments
Evolution of Markets – eCommerce & Retail
Evolution of Markets – Enterprise Fintech
Evolution of Markets – Future of Work & Labor

Evolution of Markets – Microfinance & P2P Lending
Human Advancement – Biometrics & Augmentation
Human Advancement – Cannabis & CBD
Human Advancement – Super-foods & Nootropics
Revolution in Transportation – Autonomous Vehicles
Revolution in Transportation – Future of Mass Transportation
Revolution in Transportation – Mobility Alternatives
Sustainability & Population – Climate Change & Food Security
Sustainability & Population – Climate Change & Infrastructure Security
Sustainability & Population – Climate Change & Water Security
Sustainability & Population – Future of Education

Sustainability & Population – Population Change & Migration
Sustainability & Population – Oceans; Agriculture & Exploration
Sustainability & Population – Space; Engineering & Exploration
Sustainability & Population – Sustainable Food Alternatives