Why we should all invest more like Crows: Piet Viljoen on the danger of chasing shiny things

This excellent piece is drawn from star money manager Piet Viljoen's weekly newsletter to his clients. Using crows - cautious by nature despite their reputation for loving shiny objects - as his central metaphor, Viljoen walks through five recent market manias (China, Covid vaccine makers, GLP-1 drugs, Rheinmetall, and memory stocks) where investors piled into the hottest trade just before it collapsed. His point: chasing whatever's glittering usually means arriving too late, and the better returns often sit quietly in the assets everyone else has ignored..By Piet Viljoen.If only we could be more like crows.Crows are known for their intelligence and adaptability and have long been associated with collecting shiny objects. However, studies show that this behaviour is somewhat exaggerated. While crows may occasionally pick up reflective items, they are not universally obsessed with them. Despite, or maybe even because of, their intelligence, they are often cautious around bright, shiny things.On the other hand, we humans do seem to be obsessed with them - especially when it comes to investing. We just can't help ourselves when it comes to the latest high-performing asset. As soon as a stock or group of stocks performs exceptionally well, we immediately start expending tremendous effort to become experts in whatever we think drives their performance.Just in time to watch them come back to earth.Here are just some examples from the past few years:Shiny, bright object #1 - ChinaAround 2018, China was all the rage. Fund managers had become Sinophiles. Some of us had even started learning Mandarin. There was growth as far as the eye could see - except that the eye couldn't see far enough to anticipate a centralised, communist government cracking down on speculative activity, leading to a significant derating of stocks.Alibaba, a market darling at the time, traded at $200 and eventually reached $300. Today, it's trading below $100. According to most market commentators, China is uninvestable. The Mandarin classes are empty - today, people are learning Korean to watch Squid Game without subtitles.Instead of focusing on the bright, shiny Chinese thing from 2014 to 2018, investors would have been better served by looking for value outside that niche, such as the luxury goods sector. LVMH, the sector bellwether, rose 4X post-2018 as Chinese stocks collapsed. Shiny, bright thing #2 - Vaccine makersDuring the COVID-19 panic, governments released daily death statistics. This, of course, heightened the sense of dread amid widespread lockdowns and the curtailment of other freedoms. When Moderna developed one of the first vaccines against the virus, its popularity skyrocketed.Before 2020, Moderna had no commercial products on the market.The pandemic validated its entire scientific platform, proving that modified RNA (mRNA) could be rapidly engineered to safely produce vaccines. Analysts became specialists in this biological niche and extrapolated Moderna's earnings growth far into the future.Instead of becoming amateur vaccinologists and studying the nuances of mRNA molecular biology, analysts would have been better off simply ascertaining that Moderna was essentially a one-product company. When demand for boosters declined post-Covid, Moderna’s share price fell by more than 90%. All the time spent studying mRNA vaccines would have been better spent thinking about human behaviour. Travel-related stocks such as Booking Holdings and Marriott increased by more than 4X in the years following reopening.Shiny, bright thing #3 - GLP-1 drugsStaying with the pharmaceutical theme, remember when Copenhagen-headquartered Novo Nordisk had a market cap larger than Denmark's GDP? This was a result of its coming to market with the first GLP-1 drug, Ozempic. Unsurprisingly, taking a pill instead of going for a 5km run and choosing smaller portions proved to be quite a popular way to lose weight. Novo Nordisk made a ton of money.Analysts, of course, fresh from studying mRNA biology, now turned their attention to GLP-1 biologics and extrapolated Novo Nordisk's results far into the future.Of course, when one company makes a lot of money from a product, it invites competition, which, in this case, didn't take long to arrive. Today, Novo Nordisk is worth 60% less than at its 2024 peak. If analysts had instead spent their time considering the second-order effects of the widespread take-up of GLP-1s and had simply avoided alcohol and fast-food companies, they would have been much better off.Shiny, bright thing #4 - RheinmetallRheinmetall (a German weapons company) was trading at 90 euros when Russia invaded Ukraine. Three years later, in February 2025, its share price began to rise exponentially and ultimately peaked at 1,980 euros in September 2025, up 20X.By the time Rheinmetall's share price had 20X’d, it was no longer ignored. Analysts were burning the midnight oil to become geopolitical specialists, hoping to predict tensions across borders and, thereby, the demand for munitions supplied by companies like Rheinmetall. By the time they had developed this newfound skill, it was too late.Today, Rheinmetall’s share price is 50% lower than it was last year, despite a new conflict breaking out. Instead of becoming warmongers, analysts might have looked around to see which assets wars are usually fought over, and invested in energy stocks.A broad index of energy stocks is up by over 25% since Rheinmetall (and other munitions stocks) became popular and subsequently imploded.Shiny, bright thing #5 - Memory stocksThe shift towards high-bandwidth memory (HBM) for AI accelerators, combined with tight global supplies, has created a memory shortage, granting producers immense pricing power. Analysts have now become specialists in the pros and cons of different types of memory (HBM, DRAM, NAND, etc.) as well as the chips they run on. As we've seen with stocks that have 10X'd over the past year, such as Micron (a capital-intensive designer and manufacturer of memory and storage solutions), analysts have studied hard to understand the drivers.What they did not study is history.Like all capital-intensive sectors, the memory sector is notorious for its boom-and-bust cycles. It's not a question of whether the bubble will pop, but when. The question that should exercise our minds is not "why will this cycle last longer than previous ones?" but rather, "why won’t China disrupt this manufacturing process, as it has disrupted almost every other manufacturing process?"Perhaps now is the time to start thinking about the disruptor as a potential destination for our investment funds, rather than the overpriced, cyclical, capital-intensive Western businesses that are ripe for disruption.The lesson from all these recent events is that whenever investors fixate on a new, shiny, bright thing, it’s best to simply avoid it and either buy the asset that isn't receiving all the attention, or consider which other assets will be positively or negatively impacted by that thing.But above all, if we could only learn to be like a crow - cautious of shiny, bright things - our portfolios would be so much better off.To subscribe directly to Piet Viljoen’s free weekly newsletter, click here.

Why we should all invest more like Crows: Piet Viljoen on the danger of chasing shiny things

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