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Today's big stories

Goldman Sachs laid out the 10 most important investment themes for 2021
Morgan Stanley doesn't think you have to choose between ethics and profits – Read Now
Lemonade announced better-than-expected quarterly earnings

1.

Cancel Culture

What’s Going On Here?

Goldman Sachs is totally done with 2020: a new report from the investment bank looked at the 10 most important investment themes for 2021.

What Does This Mean?

Goldman’s expecting global growth to recover in earnest next year, which should be good news for investments that are sensitive to economic activity: think commodities, emerging market investments, and cyclical stocks like energy, financials, and consumer discretionaries.

Still, Goldman warned investors not to get too carried away just because Pfizer and BioNTech have announced an effective coronavirus vaccine. The higher stocks rise, after all, the more investors will rely on future growth. And that, Goldman says, is a risky place to be: new winter lockdowns could still damage near-term economic activity, while vaccine setbacks and virus mutations might end up delaying growth – and put economically sensitive stocks through the wringer.

Why Should I Care?

For markets: The winners and losers.
Goldman doesn’t have high hopes for the US dollar or, in the short term, for lockdown-bruised European investments. Instead, it recommends turning your attention to China, Japan, and Korea, all of which are facing a more promising growth outlook and a lower pandemic risk. The investment bank’s also sticking with its recommendation to buy gold and silver, and making the case for oil's price to rise 50% by the end of 2021.

Zooming: The battle continues.
Sorry to disappoint, but Goldman Sachs hasn’t made its mind up about one of investors’ favorite rivalries: cheap-looking “value” stocks versus fast-climbing “growth” stocks. While the bank thinks investors are more likely to move away from growth stocks and toward value stocks if economic growth picks up, it can’t say for sure that it’ll actually play out that way. There could be even more stay-at-home orders to come that’ll benefit fast-growing tech companies, while the US election outcome – which saw legislative power split between two competing parties – could ruin attempts to cut Big Tech down to size.

Spot opportunity: How to pick winners like Goldman Sachs does.

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2. Analyst Take

Why Profits And Ethics Go Hand In Hand

What’s Going On Here?

There’s a myth that if you want to invest in companies that line up with your personal values, you’ll need to sacrifice returns.

But Jessica Alsford, global head of sustainability research at Morgan Stanley, doesn’t think that’s the right way to think about ethical investing.

What it’s really about, Jessica says, is protecting your money from flawed business activities that’ll harm your returns in the long run.

Put simply, the world is changing, and companies have two options: change with it, or go the way of the dinosaur.

Our interview with Jessica is a great deep-dive into this knotty area: give it a listen to find out why profits and ethics go hand in hand, and how your investments can drive change too.

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3.

Brain Freeze

What’s Going On Here?

Lemonade reported better-than-expected third-quarter earnings late on Tuesday, but all this success might've gone straight to the insurance technology firm’s head.

What Does This Mean?

This was only Lemonade’s second earnings update since its successful stock market debut in July, and the “insurtech” came out swinging with profit and sales that beat analysts’ expectations. That’s down to strong growth in customer numbers, which bumped up the money it made from yearly premiums. The company’s feeling positive about what comes next too, delivering a more appealing outlook for the rest of the year than its previous update. All that, and Lemonade’s shares still fell flat with investors.

Why Should I Care?

For markets: From lockdowns to lockups.
The drop in Lemonade’s share price might have something to do with the impending expiry of the insurtech’s “lockup” – the period of time following an initial public offering (IPO) when employees and early investors are prohibited from selling their shares. A lockup's a good way for a company to make sure the stock market isn’t flooded with too many shares the moment it lists, but it does have to expire eventually – usually after 90 to 180 days. And when it does, the sudden surge in shares typically causes a stock to fall by as much as 3%...

The bigger picture: Go, Europe, go.
Despite all the turmoil, 2020’s been quite the year for IPOs: last quarter was the busiest in 20 years, in fact (tweet this). But that’s been truer of places like the US and China than it has Europe – especially when it comes to tech listings. Research firm McKinsey reckons that’s either down to difficulties with raising funds or the region’s less favorable rules around employee stock options, which are typically used to attract top talent. Still, with a teeming pipeline of potential European tech IPOs just waiting to blow, the race might not be over yet.

Take action: How to profit when stocks like Lemonade’s hit the market.

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💬 Quote of the day

“My keys to longevity? Wine, drumming, and reading.”

– Viola Smith (the "fastest girl drummer in the world" who died on Tuesday)

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🌍 Finimize Community

🌱 Speaking of ethical investing…

Moments ago, we were talking about why investing in a way that matches your values doesn’t need to be a compromise. So if our interview with Morgan Stanley’s Jessica Alsford has you all inspired, join us next week for even more ideas on how to put her advice into action.

🌏 Fintech for Ethical Investing: 6pm Dubai Time, November 16th
🙋‍♀️ Women & Investing: 2pm UK Time, November 18th
😊 The Art of Finding The Joy of Money with Julia Newbould: 5.30pm Perth Time, November 19th
🚀 Next Gen Investor Summit: 12pm UK Time, December 1st

📚 What we're reading

How to nail your high school reunion (YouTube)
Furries head to the Four Seasons (Buzzfeed)
From Russia with love (IFL Science)

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Finimize - 🤫 Goldman writes off 2020

Today's big stories

Cancel Culture

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Why Profits And Ethics Go Hand In Hand

🍹 Sit back and let AJ Bell do the work

Brain Freeze

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🌱 Speaking of ethical investing…

👑 Earn your first royalties in six months

Older messages

😢 Vaccines won't save oil

😬 Europe takes down Amazon

🇺🇸 America had a busy week

👑 Long live Alibaba

⚠️ Don’t celebrate just yet

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