I never buy these industries: banks, restaurants, oil, bio, technology, etc.

REDDIT.COMApr 10, 9:56 PM UTC

Key insights

  • An individual investor outlines industries they avoid due to lack of understanding or perceived risk, including banks, restaurants, oil, biotech, technology, and international stocks. This reflects a value investing approach focused on a 'circle of competence,' potentially signaling reduced retail investor appetite for these sectors.
I never buy these industries: banks, restaurants, oil, bio, technology, etc.

In the spirit of Buffett's circle of competence, there are some industries that I never buy, or more precisely don't feel worth spending time on. I feel people misunderstood why he puts some companies out of his circle of competence, Buffett understands these companies well (pretty sure he can read the financial statements of Microsoft better than all of us, and talked to Bill Gates long enough to understand the company), he just doesn't think they meet his criteria.

Here are a few industries I avoid, sort of to reduce my circle of competence to a manageable size. what are yours?

  1. Banks. I just have no idea how banks set value for their holdings, too much magic for me. 2. Restaurants. Fast food, slow food or somewhere in between, they come and go frequently. 3. Fashion. Shoes, clothes, sports, casual, tastes change in cycles, similar to restaurants. 4. Bio. Those are only suitable for VCs, they play a different game that I cannot afford. 5. Oil. Why gamble my savings on a cartel, most of whom are constantly engaged in some conflict. And I really don't understand the industry, e.g., pipelines, infra, etc. 6. Gold. I guess that's a macro play, what do I know about that, given that I'm hanging around in Reddit? 7. Technology. I work in big tech most of my life, I never have any sense of whether this is a good quarter or bad quarter for the company I work for. More importantly there is too much innovation, basically all the smart young geniuses constantly try to kill the old guard, too much uncertainty. 8. International. There are enough companies in the US of A. I have no idea/confidence about the financial reporting of other countries, let alone the currency risk.

There are still enough companies out there even with these filters. I'm just looking for my tiny circle of competence.

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