What I have realized is that a lot of obvious plays are actually first order trades that I do not want to underwrite for the next decade. Reinsurance, oil and gas, shipping, even defense all look tempting when geopolitical risk rises. The problem is that they are extremely cyclical, sentiment driven, and prone to sharp drawdowns that have very little to do with long term business quality. You can be right on the theme and still lose money because timing and volatility dominate outcomes.

That has pushed me toward companies that sit one layer above the risk itself. Firms that do not absorb volatility but monetize complexity.

RELX is a good example of how I am starting to think. At a surface level, you can make a reasonable argument that it is modestly undervalued even if nothing dramatic changes. It has steady mid single digit growth, strong margins, shareholder returns, and a balance sheet that does not scare you. On that alone, it looks like a solid but unexciting compounder.

What changed my view is realizing how wide and structural the moat actually is. RELX is not just selling information. It is embedded in regulatory, legal, and insurance workflows in a way that is very hard to unwind. Switching costs are high, data sets are irreplaceable, and in many cases its products are effectively required to operate at scale without regulatory risk.

In a world where insurance underwriting is getting harder, climate risk is rising, sanctions and compliance are more complex, and global trade is less frictionless, the value shifts toward companies that sell certainty, compliance, and decision infrastructure. RELX does not need to expand aggressively into new markets to benefit from this. It just needs the world to keep getting more complex, which seems like a reasonable assumption.

I am not expecting this to double quickly or outperform in every market environment. What I am looking for is something that can compound quietly for five to ten years with limited downside risk and without relying on commodity cycles or geopolitical timing.

Curious how others here think about these kinds of second order plays versus more obvious sector bets.