The Rules of Investing: A bright future for growth investing

Livewire Exclusive

Livewire Markets

For decades, traditional wisdom held that value investing is the only way to outperform, and with good reason. Until the GFC, value had outperformed growth in all but a few brief periods, and those periods immediately preceded a major bear market. But for nearly a decade now, growth has produced superior returns.

A look at the top 10 companies in the world articulates a fascinating story. As the world exited the worst of the GFC, the top 10 companies in the world were all still traditional businesses – oil, supermarkets, banks, and telcos. 10 years later, the list is dominated by digital businesses.

This week’s guest on the podcast is Nick Griffin, Chief Investment Officer at Munro Partners, and he believes these businesses are fundamentally different to traditional ‘bricks and mortar’ businesses.

“Google’s now worth just over $800B. It’s the number one search engine in the world. The number two search engine in the world was Yahoo, and they sold it last year for $6B. That’s a 99% difference between number one and two. That doesn’t happen in any other industry… That network effect means that a lot of these companies are growing well beyond the borders that we traditionally thought possible.”

In this week’s podcast, we discuss:

  • How and why he came to the growth investing philosophy
  • The role of valuation for a growth investor
  • The power of network effects and why digital businesses are so different to traditional businesses
  • The five characteristics of a great growth company
  • Why Netflix could be a $400B company
  • Why Amazon is still cheap at current levels
  • The potential source of the next megacorporation and the disruption of traditional sports

Links discussed in the interview:

  1. Hendrik Bessembinder - Do Stocks Outperform Treasury bills?
  2. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. Written by Erik Brynjolfsson & Andrew McAfee.

About Munro Partners

Munro provides all investors, with an institutional quality, global fund manager with the ability to identify sustainable growth trends that are under appreciated and mispriced by the market, and the resulting winning and losing stocks. Find out how.


2 topics

1 contributor mentioned

Livewire Exclusive
Livewire Markets

Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment