Where to Fish

“The first rule of fishing is fish where the fish are.”- Charlie Munger

I think before thinking of a geographic region, a sector might be more fundamental. Terry Smith's ideas of fishing in the 3 sectors of consumer products, healthcare and technology is due to the enduring ROIC of those three. The enduring ROIC of those three is from its moat(s) that provide it with a competitive advantage and pricing power. My fondness for tangible wealth is silly at times and leads me to energy, material and cable companies. Those three sectors require a tremendous amount of capital expenditure and its pricing power is almost non-existent due to commodity cycles. Even cable as it works against the wheels of technology when access gets cheaper over time. This is compared to sectors I should look at with light-asset companies that have pricing power due to its structure. I need to get the structure right from the foundation of the building. It is hard to change habits though as evidenced by my infatuation in my portfolio with energy and increasingly material. It is difficult to know something about technology and medicine, but I can start learning from consumer products as I am a consumer. Medicine will need to be worked on and maybe I can see patterns from the two in technology one day.