YouSaid · the spoken record

Tom Slater

lines on the record: 59
first: 2020-12-18
most recent: 2020-12-18
sittings or episodes: 1
sources: podcast

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“I think it would be the extent to what you do influences your views. It's the wrong way around to think you can sit and think about things and then that should influence what you do. Instead, you've got to, you don't sit behind your desk and pontificate. You've got to get out into the world. There are so many interesting sources of information. Fund management gets most of its information from a very small number of people. It's situated mainly in London and New York. But there's a whole world out there. I've moved my family out to Silicon Valley on three different occasions and done extended trips. The people that you meet, the entrepreneurs, the investors, they can shape the way you view the world in a way that's extremely helpful. To the job. So get out and do things and meet people.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I used to run the graduate recruitment for investors at Beta Gifford. And one of the things we tried very hard to get away from was business studies or economics graduates and tried to get much more into the liberal arts. I think you could get people with curiosity that weren't consumed with that ambition to work in finance.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I worry about graduates who are considering a career in finance or growth investing. I think being interested in financial markets is not likely to be a good indicator that somebody's going to be a good investor. I think a much better indicator is whether they're interested in companies, whether they have that curiosity about business models, what makes a company work fascinating entrepreneurs. I think all of the pieces around interacting financial markets, those are sort of skills that you can teach somewhere. But financial markets are not intrinsically interesting in and of themselves. What's much more interesting are the underlying companies. And if you can make good judgments about those things, I think the finance piece looks after itself.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“You die in a survival situation, you lose the war. So long as you can make that mental leap, I think that's some of the most interesting literature on investment. In terms of what I'm currently reading through, I've just finished Reed Hastings' book on the culture of Netflix, some fascinating observations in there. I'm reading linked at the moment, which is about the impact of complex networks in so many fields of endeavor. But all of those I listened to on Audible when I'm out running. That's become my reading time these days.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think when it comes to investment, I believe some of the best books about investing aren't written about investment at all. It's getting to read about people interacting with complex systems and lots of other settings. So the psychology of military incompetence by Norman Dixon or deep survival by Lawrence Gonzalez or some of Ato Guande's books on medicine. I think there's lots of interesting tips in there for an interested investor. But there's just one crucial point to remember, which is that in investment, the upside is unbounded and the downside is constrained. Whereas in I think all of these other settings, the downside is catastrophic. You kill the patient.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Who's been at Betagford for 36 years? And just what I've learned from him about both retaining just absolute curiosity and focus on companies, focus on process and differentiating process and having ambition in what we're trying to do. Such an important mentor for me. As well as, in fact, Max Ward, who was the manager of Scottish Mortgage Before James. And again, exemplified the power of positive thinking and an optimism, which I think is so crucial to generating long-run investment returns.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you mentioned, like most of the investment partners at Bay to Gift Fed, I've spent my whole career at the firm. And starting back in the UK department with Ian McCombie and Jared Callahan, Charles Plowden, who I think our UK team back at that point was just a powerhouse in the UK equity market and it embraced the tools of free cash flow yields, et cetera, that were so effective through the 2000s. I think I learned a lot about the morality of investing from then. I'm working with James Anderson.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think like most people, I'm enjoying the fourth series of the crown on Netflix at the moment addressing a really interesting period in the British monarchy. I've also been enjoying Ted Lasso on Apple TV and just a great commentary on the power of positive thinking. I think we're just in a fortunate position that there's so much great content out there at the moment. I'm really looking forward to that's been delayed by the coronavirus is Dennis Fielner's adaptation of June, which I think is coming next year. But one of my favorite science fiction books, and we were in Jordan a couple of years ago in Wadi Rum where the film is... So I think that's going to be an absolutely spectacular movie.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's actually not unusual to see a big winner like Teza. If you look over that timeframe, that's been the case with Amazon over the past 15 years. That's been the case for us with Tencent, the Chinese gaming company over the past 12 years, maybe with not quite the same attraction of headlines that Tesla has had. But the structure of returns is clear. It's that small number of big winners. And so to directly answer your question about the structure of the portfolio, where we still see a path to significant upside, where we see an evolving opportunity, we're very loath to sell stocks that we think are capital. And we allow them to become a big part of the portfolio.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of excess value created by the US equity market over that 90 year period. And of that half of the excess value creation came from just 90 companies. So stock markets are driven by a really small number of exceptional companies. And so what we mustn't do as long-term investors is truncate the impact of those big winners. So go back to talking about it in three specific examples since buying Tesla seven years ago, I don't know how many times I've been told to sell it. It's a hard seven or eight drawdowns of at least 30% in that period. And every time it goes up, people know when are you going to sell.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“To sell a stock. But actually, the biggest danger for a long-term buy and hold investor is that you sell a stock prematurely and that you don't capture that outsized impact of that small number of companies. There was a really interesting piece of work done by an academic at Arizona State University fairly recently, Professor Bessenbender. And he looked at 90 years of US stock market data. And what that showed is of the sort of 26,000 companies that you could have invested in over that period. All of the return came from just 4% of the companies. But in fact, it was even more concentrated that than that. So I think his numbers were there, there was about 32%.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And there was one rule which emerged which is actually quite consistent through time, which was that in any five-year period, about 5% of stocks go up fivefold, at least fivefold. And so one of the things we focused on is has this company got the potential to go up at least fivefold? And why is it more likely for this company than a stock picks at random? The implication of that for portfolios is quite interesting because what you're saying is that if you have a buy and hold portfolio, a huge proportion of the return is going to be concentrated in the top two or three successful holdings. So come back to come back to this point about what is a mistake. People rightly focus on seldom discipline and what caused”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, the way that I think about this is it comes back to this asymmetry of returns or the concentration of returns in a small number of companies. So I was doing some work on this back in 2012, 2013. And the starting point for me was actually trying to think about outcomes for individual companies. Amazon and said it had 100% upside and somebody else was looking at alphabet and said it had 200% upside, how could we think about those different outcomes and how would you attach probabilities to them? The way I looked at it was actually inspired by Kahneman's book, thinking about base rates. So let's look at the past 30 years of the S&P 500. What can you say about stock?”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And because the international business wasn't making much money at that time. And I think our insight was that it did seem for a long time that Netflix wouldn't get away with what it had managed to achieve in the US in other markets because the incumbents would see what had happened and they wouldn't let it happen. And our insight was that they managed to turn on all these markets in one sweep and that the traction that they were getting would ultimately lead to an extremely profitable business. And so it was that XUS piece when everybody else was focused on the US subscriber base that I think was our insight at that point.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“But it's the ones that you look at, you do the analysis on and you don't buy that then turn out to be big winners. And I put Netflix into that category for us. We were looking at it back in, I think it was 2012, around about the time they split they announced their plan to split the streaming and the DVD business. which was taken very badly by both their customers and the stock markets. We didn't take the plunge and buy the stock at that point, which I see as one of my biggest mistakes over the past 10 years. But then looking at the stock maybe three years later, and it was up a lot at that point. And of course, it's very difficult to buy a stock that's gone up several folds since you last looked at it.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll link it to Netflix because I think there's a few points in there that are really relevant to our process. What we're trying to do is look for big winners. On the sort of time horizon that we have to 10 years, you see this power law distribution in stock market returns. You see a very small number of big winners. And so what we're trying to do is identify companies with that sort of potential and then where we find them aim to be very patient and long-term owners accepting that at times we'll look very out of favor with the market. And one consequence of that approach is that actually the biggest mistakes that you make are not stocks that you own which go down, which are inevitable. I make lots of mistakes.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've now opened an investment office in Shanghai where one of my partners has moved out from Edinburgh that some of my Chinese colleagues have moved back to China as part of that effort. And a really important part of understanding what's going on in the world is understanding some of those developments. I think looking at the US with an international perspective can yield insights that others aren't looking for.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think for most of my career, the emergence of China as a global economic superpower has been an absolutely central phenomenon in the world of investing. And not only its economic rise, but the emergence of companies on the east coast of China with the innovative capacity and entrepreneurship to match some of those that you have on the west coast of the US. And so I suppose one of the things I take away from my experience is just an appreciation of that phenomenon, helped by some of my Chinese colleagues, helped by the fact that”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Another take on it would be that if I, as observing what's been happening in our company over the past five years, maybe a little longer, is just seeing the impact of machine learning and artificial intelligence and what these technologies are capable of. And it's that ability to ingest huge amounts of quantitative data and spot patterns in a way that a human just isn't capable of. And so we've been having an experiment within Bailey Gifford looking at could we apply these same technologies to recreate the human investors that we have. And so our systematic investment strategy, which we started incubating in the past couple of months after After three years of investment in the team and the technology and the algorithms is our own experiment trying to disrupt ourselves in going about the task of investment.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“We see in markets, which is this constant attempt to predict what a company will earn this quarter or next quarter more accurately than everybody else, which is, again, we think, firstly, that we have no advantage in. And it's so important for an investor to be able to articulate what they think their own advantages. We spend so much time asking it of companies, but so little time asking it of ourselves. But we have no advantage in that more precise estimation of short-term earnings than anybody else. But what we do have, you know, being in Edinburgh, having a bit of distance and perspective on what's happening in financial markets is maybe that ability to be patient in this most impatient of industries. And we think that's more likely to add value for our clients over time.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll answer that in two ways, if I may. I think the first is that our process is very qualitative. What we're trying to think about are what are the big drivers? Where could the revenues of this company be five or ten years from now? What are the competitive advantages is really getting into questions about profitability and margins. But what is the corporate culture? What is it about that makes this business special? Why can't somebody else do it? And we think if we can answer some of those more qualitative questions, I think it gets you to broadly correct answers the left of the decimal point, if you will. And I see much more value in that for us than this, you know, what...”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And let me talk about as an example in advertising. A great deal of television advertising is sold at the upfront in New York each spring. And it's where big advertisers will go and bet on the content slate of the broadcasters and spend significant chunks of their marketing budget for the year. Now, in a world where we have connected television, a huge amount of data about the audience that content has been broadcast to, particularly through connected television platforms like Roku, does a ceremony like that persist or does the much more effective data-driven advertising products of the digital age now start? To make significant inroads into that market. And so I think that's a really helpful framework to us in trying to think about what the post-COVID world looks like.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Licenses. And I think those are the really challenging questions. It's not will demand decline. Of course it will decline as we come out of lockdown. And I think if you expand that more broadly, one of the frameworks that I've found really helpful, and it's work done by one of my colleagues, Dave Butznowski, he's a fascinating analyst. Drawing on an idea of accumulated accidents. So this idea that what were the structures that were the norm before COVID hit that weren't the sort of local maximal or the perfect way that something should be done, but instead just the product of accumulated accidents over time. Because I think those are the things that we're unlikely to go back to as COVID starts to unwind.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of the service. I think the last number I saw was that they had 11 million paying customers. So what happens going forward? Well, if the vaccines are as effective as we hope, then I think we'll all be having a lot more in-person meetings because everybody is fed up of being Cupid home. They want to get out. So the unprecedented level of demand that we have today, of course, declines. But then the question is, Everybody knows what Zoom is and I'm not talking about people in the IT departments of big enterprises, it's become a verb. Millions of salespeople and marketing people and people in education understand this product now. So of the billion knowledge workers that are on the planet, how much of that is addressable for this company that starts with $11 million?”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Somewhere in offices that's only used for video conferencing and spent about half an hour trying to set up the call and then being on hand when we actually tried to do it in person the next day. But so the constraint on much broader use of video conferencing was that it was a dreadful product. And as you created a much more engaging user experience as you made it possible for people to just do video conferencing, that you would see an explosion in the scale of the market and also a viral selling dynamics that if iPhoned you via Zoom and you had a good experience you would say what's this product? I'm going to use it. And I think that dynamic was unfolding through 2019. But with the impact of the virus, usage has exploded. I think now they talk about maybe 300 million users.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, this is a really interesting area and I think for sure a lot of the companies that we own have been beneficiaries of the circumstances we find ourselves in. We own Zoom, the video communications platform, which we bought in early 2019. Stick with that one for a moment and maybe explore some of the issues. The insight that we had when we participated in the IPO of Zoom was that video communications in the enterprise was massively underpenetrated. If we were having this conversation a couple of years ago via video conference, Barry, what I think we would have done is that your IT team and my IT team would have arranged a meeting, they'd have gone into a room that's”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you can tap into a direct relationship with the consumers through your website, if you can have an directly employed agent force but give them all the digital tools to make them more effective in their jobs, then I think that gives you a big competitive advantage over traditional incumbents.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the other angle I would go at it from would be about those companies that can harness this new world that we live in, this technology-led world to use new business models in established industries. So insurance is an interesting one. We invest in lemonade IPOs recently. I think what they've done in creating a completely digital experience for their customers in terms of accessing their insurance products, in terms of making claims, just is really challenging for business models that are based on mainframe computing and expensive distribution. But it could go on. Redfin in real estate as another example of that.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“As they've attracted more and more merchants, they can then negotiate better and better terms with their suppliers and pass that on to the smaller merchants. So they're really selling scale to those underlying customers. Now, Shopify is doing that in the retail area, but if you take a company like Stripe in payments, they're navigating the payments infrastructure is a phenomenally challenging thing because there's different regulations, there's different banks in every geography that you go to, different business practices, almost impossible for small businesses to incorporate payments on a global scale into what they're doing. But what Stripe has done is navigate that incredibly complex world and then make”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think one of the interesting dynamics that we're seeing in the market today is around the companies that are providing scale as a service. And what I mean by that is that the biggest online players have had phenomenal resources at their disposal, which has been very hard to compute with. But if you look at something like a Shopify, that company has created is a platform for merchants to compete on a more equal footing with the likes of Amazon and Walmart by providing them with the tools to create their online store, the same sort of browsing experience for their customers, the access to a payments gateway, increasingly access to two-day fulfillment. And so they've created that scale themselves. And then as they...”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Which means better outcomes for companies, which means you attract more companies. So I think it is in infrastructure, it's in a very powerful position. I think Microsoft has done very well at using its distribution into the enterprise space to really get itself back into the game. And I think it remains to be seen how Google is offering under the leadership of Thomas Curian competes from here because it's obviously a company with phenomenal technological prowess. But this shift in enterprise from on-premise to the cloud is one which I think plays out over the next 10 or 20 years and is of enormously large size. So I think the capitalizations that you mentioned sort of attach to things such as Snowflake reflect the fact that investors are starting to incorporate just the longevity of this shift into their Think”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I think Ever is a long time, but some of the things we do know about Amazon's web services business is firstly that the addressable opportunity is very, very large, trillion dollar plus market for IT infrastructure. We know it has a very strong first mover advantage that it's got to scale long before others. If you listen to Jeff Bezos, the Amazon CEO talk, he would say he was amazed at the head start he was able to get in this business. I think few people appreciated just how fantastic the economics of it could be. And I think scale is a self-reinforcing advantage here that it allows you to invest in infrastructure and better service and the bigger data sets mean better machine learning.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“The internet and also from the real economy. I think it's a much more nuanced question for some of these companies when you start trillion dollars of capitalization. So what excites me is that you see some of the technologies that have driven this transformation in retail, this transformation in media over the past 20 years being applied to areas which have just seen nothing like that pace of change. And I think that creates a whole new raft of opportunities in areas from insurance to real estate to the automotive industry. I think sort of one of the things that's so exciting for a growth investor at the current time is just how We're seeing the broadening of the impact of Moore's Law of ubiquitous mobile communications, of advanced software across huge swathes of the economy.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“But also this sort of intangible quality of being able to move into areas that are somewhat adjacent to where they are, but where it's very hard for people to imagine their progress. So I strongly believe Amazon Web Services is just about the most important business that exists in the world today. Now, Wall Street is very good at valuing today's products, today's markets. It's very bad at anticipating or valuing imagination and ambition. And that has been such an important driver of value growth at Amazon. So I think these companies, you know, over the past decade, when everybody's been searching for who is the next alphabet, who is the next Facebook, who is the next Amazon, what we've seen is actually those companies have reinvented themselves. They've got stronger as they've got bigger, that they've sucked in economic activity from across.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the first thing that we ought to be careful of is how we talk about these companies. I try to ban the use of the term Fang internally. And the reason is that it creates this idea of equivalence, that this is a group of companies driven by the same growth drivers, but also affected by the same risk factors. If you go back, I know, 15 years, we were all talking about the BRICS, which was I think an acronym coined by Jim O'Neill, but”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so our observation was that these are companies in another era that we may well have been investing in anyway because they would have come to public markets at a much earlier stage. So I think in terms of the decisions about investment, there's very little difference. There are some technical differences around the legal negotiations, around the type of shares you own. But I think that's sort of slightly tangential to the core task of picking the investments. I think the other thing to comment on is the costs at which this can be done. The ongoing charges of Scottish mortgage investment trust is around 36 basis points or just over a third of 1%. And think for our shareholders to get access to some of the world's most promising private companies. within that type of cost structure is game changing”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have to be clear about what we're trying to do here. We're investing in growth companies. And companies that we aren't venture capitalists, we're not going in and funding two people in a garage. But we are investing in companies that have chosen to stay private, possibly because in today's world where your addressable market is 3 billion people globally that have a smartphone where you can address that market without investing in significant capital. You can pay 5% of revenue to Amazon Web Services, pay 30% to an app store. And then suddenly that $3 billion people is an addressable audience. And as a result, with very modest capitalisms investors, you can see the most successful companies really grow to phenomenal size very rapidly.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And private companies really on the basis of where we find the most exceptional opportunities without worrying about a company's public or private status. And in an environment where many companies are able to grow very rapidly with very modest capital requirements, often staying private for longer, it's a structure that allows us to really maintain the opportunity set of investing in the world's greatest growth companies.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a closed-ended investment vehicle listed on the London Stock Exchange. It's capitalized at around $25 billion. It's a member of the FTSE 100 index. But it's really a collective investment vehicle that was raised originally in 1908 in the fund structures that invested in that time. But it's an incredibly flexible structure. It has an independent board of directors who are of extremely valuable source of counsel and advice for us as the managers who do a great job of protecting the interests of the tens of thousands of independent shareholders in the trust. And it's a very flexible structure being closed-ended and a permanent pool of capital, allowing us to invest in both public”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Course. The oldest client I manage money for is Scottish mortgage investment trust. We've managed that fund for 112 years through the Great Depression and two world wars. And unfortunately, the performance numbers that come out of that are not GIPs compliant. But over that 112-year period, it has been a phenomenally attractive thing for investors to be invested in an actively managed fund.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“With performance outcomes. But I think in subsequent academic results have shown that time horizon is also important in this. And as you extend the time horizon, the academic evidence is also supportive of better outcomes for active management. So I don't think the averages matter a great deal. It's much more about can you find investment manager with a philosophy and process that you believe in? Do they keep their fees to a minimum so that you as an individual have the best chance of outperforming? Because the fees are the one part that we do have certainty about. And then when you believe you have found a manager that meets those criteria, if little changes then stick with them through inevitable performance cycles.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I guess what I was getting at is if you say the market is made up of active and passive approaches to investment, then after fees you're guaranteed to see those approaches underperform whatever the benchmark is. And since the fees on active management are higher than the fees on passive management, you would expect that in some they ought to, as a group, underperform by a greater amount. But I think you have to come back to some of the challenges around what is active management. And there are some rules of, I'm not even rules of thumb, but there are some interesting academic results in this area. One we've touched on is that simply having a higher active share correlates positively.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Their own wealth tied up in the equity of the business. It's run with a very long time horizon. Exactly the type of characteristics that we're looking for in the long term growth businesses that we invest in. I would say when you talk to a bit about some of those top holdings, and if I was to pull out a difference perhaps in the way we approach the task versus some of our peers, it would be in the longevity of the holdings. Amazon, we bought in 2005, so the holding period thus far has been 15 years. It's been seven years. So it's the time horizon, not the recent growth that I think is a really important and defining characteristic.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That I think has a huge potential runway. You talked a little bit about this year and the unusual traits of this year, I think what this year has shone a spotlight on is the challenges, the education sector has faced in embracing digital tools, digital methods of delivery in the farm management industry. Here I am working from home using a whole array of cloud-based services. It probably made me more productive, not less productive. But if I look at my children and their educational experience as these stay-at-home orders have come through, it's really shone a spotlight on how slow the education sector has been to embrace some of these tools. Now, Cheg is a company that is run by its founder. They have significant amounts of equity tied up.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you look at those two companies, Cheg is an education platform. I think there are a lot of challenges faced by the education system. And what Czech has done is through a direct to consumer model based around questions and answers product. It is helping students to get measurably better outcomes in their examinations. But around that, and on top of that, it can build all sorts of products associated with student access. And in an environment where college education is so expensive and inflation is so high, actually providing a cost effective solution that demonstrates value for money for students is something”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or Amazon. These companies have been vastly underestimated for most of their life cycle. I think it was Michael Murritz at Sequoia who said, why do we persistently underestimate just how great a great company can be? And so we don't really look at multiples of NITIM earnings or NATOM sales. We look at what might this company achieve? Where could it be five years from now? And I think over that time you can only think probabilistically there isn't an answer to that question. But if you can identify one of those small number of companies that are the big winners in markets, then they can justify paying what may appear to be optically high short-term multiples because some of the growth opportunities that are bound today are so open-ended. And you see a lot of winner takes all or winner takes most economics.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the ways we would characterize our approach to investment would be the idea of growth at an unreasonable price. What it means when I say that is that we're looking for companies that address really big opportunities. And where that opportunity is often dynamic, it's often changing. why this company might be the one to benefit from that change. But we don't know. But if the opportunity is big enough, if the edge of the company is great enough, if there's something special about the way it goes about that task, then it can generate a huge amount of value. So if you look at a company like Alphabet,”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think passive indexing can be a great product for end service. I think Vanguard does a fabulous job of producing a really great value for money product for savers and doing it with real integrity. They also have a very significant active management business. And again, they bring that high quality attitude towards the way they approach the task. I think that in an era where there is so much change going on, where there are companies using new business models, often underpinned by technology, to bring transformational change in industries that have really historically seen very little progress It creates pockets of growth, creation of value, that if you can tap into as an active manager can be hugely valuable to your”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Often did that because they pursued a different goal around delivering an excellent product or service for their customers and the success followed from that. They didn't target those financial objectives.”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Portfolios. But in terms of how I would think about it, if you ask me the question today, what is Bailey Git's assets under management, I wouldn't be able to tell you the answer. It's a statistic that at one stage in our life used to be available on our internet, but we purposefully removed it. And the reason we did so is that our objective is not to grow assets under management in and of itself. What we believe is that if we do a good job from an investment standpoint for our clients, if we provide a really high level of service that the assets under management figure will take care of itself. One of the directors of the investment trust that I manage, Scottish Mortgage Investment Trust, wrote a book called Obliquity, and talking about how those firms that had the greatest success”
2020-12-18 · Masters in Business · Tom Slater on Growth Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source