Sand Hill's Chief Investment Officer, Brenda Vingiello, CFA, made a guest appearance on CNBC's Closing Bell on April 27, 2023 to share her views onread more
Navigating the Waves in Individual Stock Investing
November 2, 2021
So far in 2021, the equity market has embraced more themes, memes, and extremes than have been seen in the public markets in recent history. If one were to compare the 2021 oscillations of the stock market to a movie, it might be difficult to agree on a genre, but most would agree it’s been an upbeat story with a few twists. One way to gain exposure to the twists in an investment portfolio is to use individual equities to incrementally tilt towards areas which could be expected to resonate well into the future.
Whereas we don’t chase a meme with an investment, we do pay attention to themes which represent a shift in consumer behavior. Typically, emerging themes have been percolating below the surface, often supported by private companies who have been allocating capital to secure a foothold. Just as in downhill mountain biking (where the key is not to look at the front tire, but rather several feet ahead), individuals should be investing in the path forward rather than what’s behind.
A couple new areas where we have added some public market exposure to emerging themes includes the “buy now, pay later” sector and the cryptocurrency industry via stock positions in Affirm Holdings (AFRM) and Coinbase Global (COIN). In both cases, the companies have long had a mission to build enduring platforms supported by leading technology developed by a growing team of talented personnel. Although both are large-cap, U.S.-based companies, investors are not getting exposure to these sector pure plays in traditional equity index funds as neither AFRM nor COIN are yet in the S&P 500.
An aspect we like about AFRM and COIN is that they are leading companies in nascent industries where there is some healthy skepticism in their future quarter-by-quarter path. As uncertainty wanes, investors can gain confidence that these companies are well positioned to stay a boat length ahead of their peers in sectors with an expanding total addressable market opportunity. Recent proof points helping to build more certainty include the announcement that Amazon (AMZN) and American Airlines (AAL) are teaming up with Affirm while the NBA struck a multi-year partnership with Coinbase, making them their exclusive cryptocurrency platform partner. In contrast, if either company isn’t able to master a jibe (i.e., if they don’t effectively react to a turn in their industry), then we would expect some turbulence along their journey as they fight to stay above the waves.
Navigating the ocean in a single hull boat versus an ocean liner provides a different experience just as investing in individual stocks versus a mutual funds and ETFs. At Sand Hill, our focus on diversification drives us to embrace multiple pathways to gain exposure in your investment portfolio, including individual stocks where appropriate. Thank you for trusting us in your financial journey as we continue to maneuver the markets.
Please reference this chart and disclosures, which should be reviewed prior to or contemporaneously with this article. This article is not a recommendation or endorsement of either security, but an analysis of how securities in these sectors can enhance a portfolio.
Articles and Commentary
Information provided in written articles are for informational purposes only and should not be considered investment advice. There is a risk of loss from investments in securities, including the risk of loss of principal. The information contained herein reflects Sand Hill Global Advisors' (“SHGA”) views as of the date of publication. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. SHGA does not provide tax or legal advice. To the extent that any material herein concerns tax or legal matters, such information is not intended to be solely relied upon nor used for the purpose of making tax and/or legal decisions without first seeking independent advice from a tax and/or legal professional. SHGA has obtained the information provided herein from various third party sources believed to be reliable but such information is not guaranteed. Certain links in this site connect to other websites maintained by third parties over whom SHGA has no control. SHGA makes no representations as to the accuracy or any other aspect of information contained in other Web Sites. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. SHGA is not responsible for the consequences of any decisions or actions taken as a result of information provided in this presentation and does not warrant or guarantee the accuracy or completeness of this information. No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) redistributed without the prior written consent of SHGA.
All video presentations discuss certain investment products and/or securities and are being provided for informational purposes only, and should not be considered, and is not, investment, financial planning, tax or legal advice; nor is it a recommendation to buy or sell any securities. Investing in securities involves varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular client’s financial situation or risk tolerance. Past performance is not a guarantee of future returns. Individual performance results will vary. The opinions expressed in the video reflect Sand Hill Global Advisor’s (“SHGA”) or Brenda Vingiello’s (as applicable) views as of the date of the video. Such views are subject to change at any point without notice. Any comments, opinions, or recommendations made by any host or other guest not affiliated with SHGA in this video do not necessarily reflect the views of SHGA, and non-SHGA persons appearing in this video do not fall under the supervisory purview of SHGA. You should not treat any opinion expressed by SHGA or Ms. Vingiello as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of general opinion. Nothing presented herein is or is intended to constitute investment advice, and no investment decision should be made based solely on any information provided on this video. There is a risk of loss from an investment in securities, including the risk of loss of principal. Neither SHGA nor Ms. Vingiello guarantees any specific outcome or profit. Any forward-looking statements or forecasts contained in the video are based on assumptions and actual results may vary from any such statements or forecasts. SHGA or one of its employees may have a position in the securities discussed and may purchase or sell such securities from time to time. Some of the information in this video has been obtained from third party sources. While SHGA believes such third-party information is reliable, SHGA does not guarantee its accuracy, timeliness or completeness. SHGA encourages you to consult with a professional financial advisor prior to making any investment decision.
Other Posts By This Author
- – Welcome Back to an Economic Cycle
- – Are We in the Midst of “The Great Reset”?
- – Goldilocks Heads Back into the Forest
- – When FOMO Meets SLOMO: The Ups and Downs of Momentum Investing