The characteristics of a long term winner: Munro Partners

July 31, 2020

Nick Griffin, CIO at Munro Partners, writes for Livewire Markets:

When we think about growth versus value, and this is very topical now because growth stocks are doing well, I think it’s important to recognise that this has actually been happening for quite some time. And a lot of the trends we’re seeing here have been happening for a long time, they’re just accelerating in a post-COVID world.

The standard accusation as to why growth investing is doing well is that interest rates have fallen from say 20% to 1%. And in a post-COVID world, interest rates have gone lower, so growth stocks are going higher.

I think that is definitely part of what’s going on, but I think it also misses the point because from our point of view, Jeff Bezos set up a bookstore in his garage 20 years ago, and it’s now worth $1.6 trillion. That only happened because interest rates went from 20% to 1%. Reed Hastings set up a DVD delivery service in California and turned it into Netflix.

That only happened because interest rates went from 20% to 1%. Even here in Australia, Mike Cannon-Brookes and Scott Farquhar put software online at the University of New South Wales and turned into Atlassian, which is now worth roughly $50 billion.

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