Angel of the Morning
There is one statistic that fluctuates slightly but unfortunately remains largely true:
“A whopping 84% of all stocks owned by Americans belong to the wealthiest 10% of households. And that includes everyone’s stakes in pension plans, 401(k)s and individual retirement accounts, as well as trust funds, mutual funds and college savings programs like 529 plans.”
Looked at inversely: only around 16% of all stocks owned by Americans belong to the bottom 90%.
Considering that pensions, 401(k)s, and IRAs probably make up the large majority of the masses’ indirect introduction to equities, this leads to a lot of people not knowing where their monies go and ultimately what companies they own and support financially.
The majority of asset managers and others that live by similar names will be happy to money grab from whoever is extending handfuls of cash.
And when last week, BlackRock’s CEO Larry Fink said he’s looking to buy stakes in companies more directly, it sounded like less of a long-term strategy than simply diversifying for the sake of diversifying:
To quote Warren Buffett: “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”
Those two sentences are equally important to understand and practice.
If I’m ever going to diversify into early-stage startups then apologies to Mr. Fink, but Naval Ravikant and AngelList are much better suited to follow and invest in than BlackRock in knowing what’s what in technology and the future.
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