Morgan Stanley-Thematics The Art and Science of Picking Themes-107485004

MApril10,202403:00AMGMTGlobalFoundationThematicsMorganStanley&Co.Internationalplc++44207425-0840+44207425-9902TheArtandScienceofPickingEdwardStanley+44207425-2854ThemesEquityStrategistTheAI&Diabesitythemesrumbleon.ThishasledtoarecurringEdward.Stanley@morganstanley.comquestion:Isitbettertoholdontoawinningthemeandrisksellingtoolate...orfindemergingthemesandriskpivotingtooMatiasOvrumearly?Emphatically,theformer.EquityStrategistInthisshortreport,weattempttoprovidesomeclarityandquantitativebackingforMatias.Ovrum@morganstanley.comthemorestrategic,assetallocationquestionswehavebeenreceivinginrecentweeks:StephanMKessler1.BuytooearlyvsSelltoolate…Historysaysholdon.Returnsinyear1forQuantitativeAnalystleadingthemeshaveaveraged66%.WeappreciatethebenefitofhindsightStephan.Kessler@morganstanley.comhere.So,forthoseworriedaboutbuyingtoolate(orsellingtoolate),thesethemestypicallyfollow-throughtodeliver17%incalendaryear2.ByMorganStanleydoesandseekstodobusinesswithcontrasttheS&P500hasreturned11%annuallyoverthelastdecade.OncompaniescoveredinMorganStanleyResearch.Asaresult,theflipside,being"tooearly"tonewthemesisfraughtwithitsowninvestorsshouldbeawarethatthefirmmayhaveaconflictofchallenges.interestthatcouldaffecttheobjectivityofMorganStanleyResearch.InvestorsshouldconsiderMorganStanley2.TechvsSustainability…Sustainabilityhassee...