Stock picks of the week: more Equinor, Novo Nordisk & Investor
Long-term and aggressive when markets drop
Market thoughts for the week
If you needed more proof that markets are schizophrenic basket cases, you got it last week.
From deep depression to instant jubilation when tariffs were paused.
Probably a bit too jubilant.
A delay on massive tariffs is like a stay of execution. Sure, you get to live a little longer.
But you’re still on death row.
Investing thoughts this week
I mentioned before that I was listening to a great book on investing.
Called “What I learned about investing from Darwin,” by Pulak Prasad, a successful equity fund manager.
It’s loaded with good, helpful stuff. But two points stuck with me this week as I made my choices:
most investors don’t focus enough on compounding
most of Prasad’s success came from being aggressive in crises
Let me take a quick dive into each point.
1. Compounding
Prasad notes how a lot investors say they think long-term, but few act long-term.
He says the average holding time for most stocks and funds is super short, and getting shorter. It used to be a few years. Now it’s a few months.
He also sees a lot of investors sell after a quick surge or when a company gets expensive. Like when its PE climbs into the 40s.
We shouldn’t.
Prasad shows that the big wins come from compounding assets over very long periods of time. We shouldn’t be looking to invest for a few good years. Or sell a good company after a spike.
The big gains come from holding for decades. Or forever.
2. Lazy normally, aggressive in crises
Prasad also credits a lot of his success to laziness.
He says his firm is usually very lazy. Making only a few trades per year, because valuations of the companies they like are typically high.
But during crises, they turn hyperactive and aggressive.
The financial crisis in 2008, the euro crisis in 2011, the pandemic in 2020.
When prices fell hard and fast, they sprang to life and bought as much as they could.
My stock purchases this week
This got me inspired to take advantage of the current turmoil as much as I can.
Load up now as much as I can on the companies I like.
This week, that meant buying a bit more of three high-quality companies I’ve already invested in:
Equinor (EQNR), the giant Norwegian oil company
Investor (INVE), the giant Swedish investment company
Novo Nordisk (NOVO), the giant Danish pharma company
All three are in the red in my equity fund. It feels good to add more of each at a lower price. To be aggressive when markets fall.
But these investments feel good long-term too.
Thanks to Prasad, I’m thinking more than ever about how to let compounding do its magic for decades on end.
And if you’re thinking this way, you want to invest in things that will be around for a while.
The companies I bought this week have been. A half-century in Equinor’s case. A century for Novo Nordisk and Investor.
And they’re highly successful. Each is the biggest company by market cap in its country.
There’s no telling if these companies have another century or two in them.
But with their history and success, I think they’ve got another decade or two.
Thanks for reading. Talk to you next week.
Joel Sherwood invests each week and writes about what he buys, learns and earns. He’s a former journalist for Dow Jones and The Wall Street Journal, and a current bank employee. He lives in Stockholm, Sweden and started the Sherwood Investment Letter in January 2025. Purchases are not recommendations.