When the trend is not your friend

Livewire Exclusive

Livewire Markets

When the trend is not your friend. The idea of investing in a trend or thematic is part of the daily market vernacular, but is this just spin? Chad Padowitz, CIO of Wingate AM, believes that the idea of trends can distract investors from the critical ingredients required to select quality companies to invest in. Padowitz notes that over time very few companies succeed. The companies that do succeed tend to be those that are well run, in a good industry and that allocate capital well. Companies such as Coca Cola and Berkshire Hathaway are examples that have done well over time but are not part of a theme or trend. In contrast, if you had invested recent trends in gold funds or Chinese funds you would have done a lot of money.

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