The big winners from structural growth: Munro Partners

July 10, 2019

In an article penned for LiveWire Markets, Munro Partners’ CIO Nick Griffin talks about mean reversion.

A lot of investors like to talk about macroeconomics. They talk about mean reversion, valuation dispersion, etc. I believe that it’s a lot easier for investors, particularly private investors, to take a big step back. I would argue that mean reversion doesn’t exist in the long run.

Equity markets have very few winners and lots of losers. 50% of the S&P disappears every 20 years. Less than 5% of stocks in the S&P make up the entirety of returns over the long run. So how do you find those great winners? It’s always big structural changes that create them. During these times of macro uncertainty, people try to connect the economy with equities. I understand why, but in the long run, it doesn’t matter.

To read the article, click here.

 

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