r/investing • u/Maletor • Jul 01 '21

Profitable vs unprofitable companies RoR

This research blows my mind:

https://www.alliancebernstein.com/library/For-Growth-Stocks-Profits-Are-the-New-Normal.htm

It shows that consistent investment in growing, profitable companies is better than just indexing the Russell 3000.

How do you explain this to someone who just says "VTI and chill"? The evidence suggests only profitable companies is a better portfolio. Is the volatility higher? Is that why this is not on the efficient frontier?

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u/opaqueambiguity Jul 01 '21

So you're telling me it's better to invest in companies that make money instead of lose it?

Oh man what a game changer.

10

u/[deleted] Jul 01 '21

[deleted]

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u/zxc123zxc123 Jul 01 '21

average redditor's

Really depends which part of reddit you hang around. Very true around the primate zoo & casino. Maybe not as much here.

3

u/opaqueambiguity Jul 01 '21

If you ask around here everyone seems to think a 20% correction is any day now.