Hatch Weekly: Work it - Bulk up your investment education muscle this summer

2019 #hatchgoalz: be like Buffett

Here’s what we know: you love investing. It’s exciting and it gets your endorphins popping, especially when things are going well. Here’s another thing: the more you know about how the markets work, it’s likelier you’ll make good decisions when it comes to investing your hard-earned money. So, how do you do that exactly?Hit the books.

It’s a thing: 1000 pages a day
Warren Buffett, the single greatest investor of all time, read 500-1000 pages every single day when he was just starting out in the markets. It’s true. And he credits this time as being one of the main reasons for his financial success. We all want to be a bit like Buffett, but is it possible? Well, we think so! We’ve compiled a list of the best investment books of all time, and some websites, so you can start building your financial muscle.

The Oracle of Omaha knows a thing or two
Here’s how the Big B says knowledge works: “It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.” Ouch. Challenge accepted, Warren! And we’re not just talking investment books but annual reports, conference call transcripts, trade magazines, and articles – it all helps. Follow this formula if you want to wake up smarter.

What is Hatch?

With Hatch, you can now buy and sell shares in over 2,900 companies & 500 exchange-traded funds, all listed on the US share markets. Invest dollar amounts to buy as much or as little of a company or ETF as you like, even if it’s a fraction of a share. Powered by Kiwi Wealth. See how it works

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Cigarettes: killing it on the markets

The Guardian has just reported that the UK’s most successful stock market company is British American Tobacco (enter shocked emoji here). Yes, its products kill over 7 million customers globally each year, but who cares when portfolios look this good…?

Holy smoke!
In reality, BAT has actually been a poor performer over the last year thanks to highly commendable attempts by US regulators to ban menthol cigarettes which happen to be responsible for a quarter of BAT’s profits. The company’s share prices have slumped from a high of £55 in 2017 to roughly £24, but even after this drop they’ve made an impressive gain since 1984. For instance, if you were savvy enough to have bought £100 worth of BAT shares in 1984, and you were clever enough to reinvest the dividends, you would’ve had a sweet £33,123 this 2019, according to an analysis by brokers AJ Bell. Put that in your pipe and smoke it...

No smoke and mirrors when it comes to profits
So, how exactly did big tobacco do so well considering the backlash against the industry? Well, the threats of lawsuit payouts settled down after a mid-1990s settlement with the US authorities. Add this to the huge cash flows due to no new challengers and tobacco’s stronghold in territories like Russia, Brazil, Nigeria and Indonesia and you’ve got a winner. For instance, in 2017 BAT made £6.5bn profits on turnover of £20.3bn. In 2018 it became one of the top-five dividend payers in the UK share market. So, making stuff that kills people can be highly profitable, but times are changing. Altria Group Inc., the maker of Marlboro cigarettes, confirmed it was investing $12.8 billion in Juul Labs Inc., valuing the e-cigarette startup at $38 billion. This investment vaults Juul into the top ranks of privately owned firms, making it more valuable than Airbnb, Pinterest and SpaceX.

The blue economy

Not-so-fun-fact: our oceans are in the worst state ever. Go to your local beach and you’ll see the sad truth: the sea is full of plastic and heavy metals that are killing wildlife and destroying the fishing industry. The oceans contain 99% of available ecological space on our blue planet. And if we can just stop ruining them for a second, our oceans can give us much more than they already do.

True blue economy
The “blue economy” is a new approach to rethinking how we interact with our oceans and it includes tourism, fisheries, marine renewable energy and biotechnology which are all predicted to grow at double the rate of the rest of the economy by 2030. Small island nations like the Seychelles are pioneering this approach to see oceans as a resource that can generate wealth. By showing people how valuable the oceans can be, local people are encouraged to preserve them for future generations.

Health check for oceans
The blue economy concept involves sustainable management of oceans for now and future generations. Healthy seas are key for the health of our environment, and to accelerate economic growth by creating jobs and fighting poverty. Over 3 billion people around the world rely on the biodiversity of our world’s oceans and seas for their livelihood. Seems to us that companies who sustainably manage, conserve, protect, and restore coastal and marine ecosystems might be worth looking into. From investing in sustainable fisheries, to investing in ocean funds, if you’re a keen green, there’s a lot you can do to make a difference!

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