Resist FOMO. An asset manager created an ETF for “real investments” that avoids market fads like crypto and meme stocks.

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Marianne Ayala / Insider

A new exchange-traded fund from GCI Investors returns to fundamentals of investing. “We invest in companies and underlying companies rather than stocks,” said Guy Davis. Its potential losses, he said, are far less than the risk of investments in memes and crypto stocks.

A fund manager wants you to forget about the mind-blowing payoffs of meme stocks and crypto and get back to the basics of investing.

“We are at the very opposite end of the spectrum of meme equity investing,” said Guy Davis, managing director of GCI Investors, based in Houston, TX. “We invest in companies and underlying companies rather than just stocks.”

Two companies he likes are UK online grocery delivery company Ocado, which has grown 545% in the past five years, and waste management company GFL Environmental.

“Waste is an incredibly sexy industry,” he said. “Who would want to invest in a waste management company when they can invest in a bitcoin mining company generating thousands of dollars in returns?” ”

But he said a waste management company’s stable level of performance – even during closures spurred by the pandemic – is “unbelievable.” GFL went public in March 2020 as the pandemic was just beginning. Since then, it has risen 120% to around $ 37.

“You have a very strong industry and you have something wonderful going on individually in the business that is going to increase your return as well. This allows us to have a very high degree of confidence in the future. ” he said.

The company’s first exchange-traded fund, called Genuine Investors ETF, launched on December 1 under the symbol “GCIG”. Waste management and grocery delivery may seem like a tough sell next to the massive gains from shares of memes like GameStop and AMC, which have gained 152% and 1,200% respectively so far this year, or the gain of almost 100% of the price of bitcoin. Not to mention the mind-blowing 37,000% payouts for some metaverse-related cryptocurrencies.

But to someone who quickly became a bitcoin or memes stock millionaire, Davis says, “Well done, fantastic news. Go do something successful with it, because the chances of doing it again are infinitely small.”

He describes his approach to investing as simplistic and old-fashioned. His Genuine Investors ETF owns 23 individual companies that the company knows “inside and out” and which it says are generally not subject to outside risks such as regulatory vagaries or commodity prices.

“The potential returns could be slightly lower, but our potential losses are much more contained,” he said.

Davis said the stock market only provides opportunities, not information about companies. The S&P 500, he said, is no longer a measure of the largest companies but of the “most popular.” Tesla, a favorite among retailers enthusiastic about electric vehicles and Elon Musk, is in the top five, he noted.

“The inventory is huge; the business is tiny in terms of what it actually generates,” he said.

Davis said he knows what the companies he invests in are worth, unlike bitcoin, which he says “doesn’t know if it’s worth 50 cents or a billion dollars.”

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