There are all sorts of 'sector funds,' and approaches to 'sector investing.' The latest craze is 'socially responsible' company grouping.
I propose creating a sector of companies that produce excellent products and/or services and treat their customers like customers should be treated -- with genuine dignity, and that don't misrepresent themselves to their customers or to the public at large. We might call it the 'honest companies producing real value' sector.
It should be a sector that disqualifies companies whose stock in trade is something that degrades the dignity of human life, or profit from stimulating and then feeding the base motives. That rules out the cable providers who traffic in pornography, for example. This isn't just a 'morality play,' though that can be a very sound investment guide. It's common sense. Just look at the chart of T after they announced thier deal with porn cable provider Telecommunications Inc., back in 2000. It looks like the cross section of a ski resort -- all downhill.
Of course it will be a very small sector, and some immediate disqualifications come to mind. From recent experience I can disqualify Verizon; in fact, most of the cellular providers are patently unqualified for the sector of honest companies. These companies have employees that have lied to me as a customer. I can't help but suspect that employees who regularly lie to customers are probably lying to other parties as well. Auditors and shareholders, perhaps. But that's just a hunch.
I have identified a natural law that says that hype is inversely proportional to value. The more hype, the less real value. This is common sense. Remember common sense? Treat your customers like they matter, not like they are disposable. If you treat customers like they are disposable, you eventually run out of customers. And if you run out of customers, what sort of business have you got?
Companies that profit from bad business, from the base and unproductive motives of people, are simply making bad bets. They may flower for a season, but seasons always change.
Good business, productive, sound, and life affirming business, if you think about, is a good bet because it supports growth in the macro sense and it has going for it another natural law: good business does not go out of style.