When investing in individual stocks, it helps if the companies that you choose align with your interests and your values. This week, we talk about some of the businesses that we prefer not to invest in, and the reasons why.
- With interest rates of up to 5,000%, it’s hard to argue that payday lenders are not exploitative, and more recently, ‘buy now, pay later’ businesses are emerging to lead consumers to live beyond their means
- It’s clear from what we wear that we know nothing about fashion. In an industry where consumer trends can change quickly, not knowing what’s in and what’s out can lead to bad investing decisions
- We all like food, but the restaurant business is tough with low barriers to entry, high levels of competition, low margins and shifting consumer preferences. The industry is facing new challenges from national lockdowns and having to rapidly adapt to food delivery as the norm
- ‘Middleman’ businesses – estate agents, travel agents, recruitment agents, and their like – are being squeezed from both sides. Consumers are getting smarter, and companies are using technology to reach their customers directly
- The best-performing stocks of the last century were tobacco stocks and it’s not even close. $1 invested in the tobacco sector in 1900 would be worth over $6M today. Even with returns like these, many investors stay away due to their distaste for businesses that actively kill their customers
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