CFA, MBA, PhD – Not Needed
I am not smart and am too young to have gained much experience, so I must rely on others, or simple data metrics, to keep my money safe. This article will discuss the five leading investments where your hard-earned money will be left in the smartest hands (four securities investments and one investment/savings account). There is no singular way to determine “smarts”, but in my five examples, each investment is the epitome of their own unique smart qualities.
‘Good atmosphere and smart people can accomplish a lot.’ – Jim Simons
With the backing of my own biased, but data-driven, opinion, I honestly believe these five companies are the smartest in their prospective field. I also do not focus on a singular area of the market, or one individual measurement, and this helps to negate the effect of company size or industry. However, I will also introduce peers that come close, but fail to reach the same level. The list of tickers, in no particular order, is as follows:
- Alphabet (GOOG) (GOOGL)
- JPMorgan Chase (JPM)
- Exponent, Inc. (EXPO)
- Houlihan Lokey (HLI)
- Berkshire Hathaway (BRK.A) (BRK.B)
These five companies tick many key boxes for business and financial quality. While a few are very popular or renowned with the public, popularity is not a requirement. Rather, if customers, clients, and peers all respect these companies then they have my vote. To set the stage before discussing each, let’s compare total returns with SPY and QQQ below. As we can see, total return is not the goal, but factors such as longevity and safety are also important.
Alphabet – The Nurturing of “Other Bets”
I am sure the first obvious way to determine the smartest company is by the number of PhD Employees. To do so, I looked at data provided by workforce analysts Revelio Labs. According to the firm, Alphabet currently employs over 5,000 PhDs, or ~3.5% of the total workforce. This is certainly not the highest percentage of the total workforce, as second place Intel (INTC) has over 4% PhD level staff, and many small biotechs or engineering startups could be over 10% PhD employees. What matters is how the financial performance is supported or influenced by these smart people.
Well, Alphabet has created a trillion-dollar business so I suppose things are going well! Intel on the other hand has …….