boring and stodgy investment discussion thread

[uujjj2]

I have most of my portfolio in tech and greentech stocks, but at this point these companies seem to be getting way overvalued. So I'm thinking of broadening my investing to lame, boring (not Boring) old economy stocks. But a lot of these are overvalued too (26x earning for Walmart!) while others are cheap because they are deep in debt (AT&T). Still others are non-starters (fossil fuels obviously).

So I wanted to start a thread to discuss old economy companies that might be still good investments.

 

[garrett5688]

Nothing is more boring than index funds.

 

[LightngMcQueen]

Nothing is more boring than index funds.

There is, it is called Global Financial Asset Portfolio (Is the Global Financial Asset Portfolio the Perfect Indexing Strategy? - Part 2 - Pragmatic Capitalism)

You get it then you cross breed index funds across geography and asset classes.

Essentially you own a piece of anything that is investable. It is an ideal portfolio for the truly indecisive.

 

[uujjj2]

So here's the problem with index funds. Index funds overweight for companies with HUGE MARKET CAPS. But I already have lots of shares of Tesla, Apple, Amazon, Facebook, Nvidia. Old economy companies have little tiny market caps and they get underweighted in the index funds.

 

[LightngMcQueen]

So here's the problem with index funds. Index funds overweight for companies with HUGE MARKET CAPS. But I already have lots of shares of Tesla, Apple, Amazon, Facebook, Nvidia. Old economy companies have little tiny market caps and they get underweighted in the index funds.

Index weights are proportional to market caps, and market cap is generally proportional to company sales. So indexes are technically evenly weighted.

I you really believe that small is beautiful then you can tilt your mix and overweight on small or growth companies. This can be accomplished by adding the Small Cap index or Growth Factor index or something similar.

 

[Doggydogworld]

Berkshire Hathaway. Boring as you'll find, lots of old economy exposure. It's pretty counter-bubblical, did well in the dotcom crash.

 

[uujjj2]

Berkshire Hathaway. Boring as you'll find, lots of old economy exposure. It's pretty counter-bubblical, did well in the dotcom crash.

Berkshire is a good suggestion. But there are a few hitches. First, Berkshire at a 25x forward P/E is itself pretty richly valued. Second, most important, is that Buffett and Munger aren't going to be around much longer, and I'm not sure I'd pay the same premium to invest with Greg Abel as with Buffett and Munger.