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We follow quarterly earnings closely, but we spend a lot more time thinking about companies’ competitive positioning over the next five to 10 years, and beyond. Alphabet and Microsoft both have core businesses with amazing competitive advantages. And we can’t forget the price versus value equation at this point, after the market sell-off.
It’s important to keep in mind that a slowing of Azure’s growth rate, which was 42 per cent (constant currency) this quarter, is inevitable over time, given the size of its revenue base. Yet, it is still the fastest growing of the three US hyperscalers. Further, Microsoft has been helping clients optimise their cloud usage, which builds value for their clients in the short-term, and through longer-term customer loyalty, value for Microsoft. We also saw this dynamic in 2020.
Alphabet grew revenue 11 per cent in constant currency terms, against 39 per cent constant currency growth in the third quarter last year – so the top line wasn’t a concern for us. Costs were elevated, but there’s a path to scaling over time; we know the model scales, it’s a question of management balancing short-term cost discipline with investment for longer-term growth.
The US consumer is still in good shape, especially at the higher end as shown by luxury good results and spending patterns from card companies.
Lower end is more pressured by inflationary pressures. Costs are coming back into income statements, especially in technology. Supply chains are starting to heal.
No, this was expected given the current regulatory environment and the more recent antitrust focus on tech. There is actually very little overlap between the two companies, but the scope of antitrust investigations is being pushed out at present.
At first glance, the headline figure Adobe paid for Figma appeared high. We do note that history has shown that many technology acquisitions that appeared expensive at the time have proven with time to be bargains. We also draw some comfort from the fact that the deal makes a lot of sense strategically and from Adobe’s sound history of capital allocation.
The business was over earning with sales up a third in the last two years versus a long-term trajectory of 3 per cent to 4 per cent per annum. This was a direct result of the artificial stimulus from COVID-19.
The fund has never owned these stocks as we dislike their inherent cyclicality. We have been able to achieve our investment goal of 8 per cent to 12 per cent over the long term despite not owning them.
We accept in the short term the fund may underperform by not owning these businesses, but we always measure ourselves over a longer time frame (five years-plus) and encourage our clients to do the same.
We don’t buy companies based on short-term economic forecasts, which experience has taught us are very difficult to consistently get right. All our valuations are based on what a company will earn five years in the future and whether their competitive advantages will endure or indeed strengthen.
However, even if there is a recession in the short term, we draw comfort from both of these companies’ earnings resilience in past recessions. In addition, their current valuations we believe have already priced in a lot of potentially bad news.
Sherwin Williams is a company that we have owned in the past and would love to own again at the right price. It is the largest manufacturer and distributor of paint in North America. Based in Cleveland, it has an exceptional corporate culture, controls its own distribution, its own stores, has a low-cost-to-value product and an exceptional track record of earnings growth and capital allocation.
Balcon – favourite order is braised lamb shoulder and they have excellent charcuterie and wine list, with excellent sommeliers.
On a recent flight, a documentary on the 1992 Dream Team, the US Olympic basketball team. Names like Jordan, Johnson, Bird, Pippen, Barkley. Probably the greatest collection of sports talent in a team and made the NBA a global brand.
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Technology behind the tech; healthier lifestyles; the green transition and regulatory tailwinds. These are the mega-themes the smartest minds in the market are now firmly getting behind which they believe can help them deliver outsized profits.
Fund manager turned anti-corruption campaigner Bill Browder is advising investors to hang on to their cash until central banks stop raising interest rates and the cost of living starts to come down, before investing it strategically.
The Sohn Hearts & Minds Investment Leaders Conference, held annually, had before Friday’s event made more than $40m in collective donations to medical research. It applies the stock picks made by fund managers in an investment portfolio.
Professional gambler and arts impresario David Walsh had a brutal message for successful top money managers – you may just be lucky.
A room filled with 700 of the country’s financial luminaries and billionaires is a difficult place to pitch an investment idea but it’s a great place to raise money for charity.
Two hundred of Australia’s best and brightest money managers, bankers and entrepreneurs toasted the seventh Sohn Hearts and Minds conference at David Walsh’s Museum of Old and New Art, better known as MONA, in Hobart on Thursday night.
Top global money managers are telling investors to steer clear of companies that don’t make money and invest instead in unloved but profitable businesses, as continuing central bank interest rate rises threaten to keep markets falling.
Some of the top fund managers in the country will on Friday pitch their best investment ideas to the Sohn Hearts & Minds conference.
Perpetual’s star stock picker Anthony Aboud says companies with strong balance sheets will finally be rewarded for their discipline in an environment of rising interest rates and global market upheaval.
Perpetual’s top stock picker Anthony Aboud makes his money running against the crowd and this is why property trusts like Charter Hall are sitting right the top his list right now.
Twenty students from Kingston High School have been given the opportunity to attend the prestigious Sohn Hearts & Minds conference this week.
Gerry Cardinale, the owner of AC Milan and a host of other soccer, cricket, baseball and ice hockey assets is trying to double his money in the ‘resilient’ asset class.
Carleton’s conviction will be on full display on Friday, when he makes his third appearance at the annual Sohn Hearts & Minds Investment Leaders Conference, where stock-pickers share their best ideas in the name of medical research.
James Miller, a portfolio manager at Firetrail Investments, believes investors need to stop seeing the global decarbonisation push as a risk – and start seeing it as an opportunity.
Maggie O'Neill, Head of Marketing and Operations at HM1 joined Nick Griffin, CIO of Munro Partners to discuss the history of Hearts & Minds, Munro Partners' involvement and Nick's upcoming stock pitch.
Bob Desmond is Head of Claremont Global and Co-Portfolio Manager. He will present at the Sohn Hearts & Minds Investment Leaders Conference in Tasmania on November 18.
An increasing intransigence from authorities in Beijing toward private enterprise - and harsh pandemic restrictions - might be keeping some investors away, but the same factors are creating good opportunities in Chinese stocks.
Joyce Meng is a presenter at this year’s Sohn Hearts & Minds Investment Leaders Conference on November 18, which takes place in Hobart and aims to raise money for medical research.
Founder, CIO and CEO of Eminence Capital Ricky Sandler talks about his journey launching the $5.7 billion dollar asset manager, how the market has changed over the past decade and his motivations for participating in this year's Sohn Hearts & Minds conference.
Munro’s Nick Griffin on why he prefers Alphabet and Amazon over Meta, shorting industrials and Chinese equities, and his top picks for the energy transition.
When Auscap Asset Management founder Tim Carleton tips a stock at this month’s Sohn Hearts & Minds conference in Hobart, he doubts it will be a name that shocks investors.
One of the nation’s most influential fund managers has warned that investment markets have entered a “new phase”, with hidden risks in the form of debt sitting in super funds, private equity and big investors that is set to test the financial system.
The veteran fund manager says the most uncertain period of his career will deliver huge opportunities – providing his firm can stick to its system.
When former Amcor chief executive Ken MacKenzie was named the new chairman of BHP five years ago, that was a sign for top-rated fund manager Peter Cooper to move back into the mining giant.
Speaking to The Australian Financial Review before the Sohn Hearts & Minds conference, Sandler named global on-demand ride-sharing and food delivery service Uber Technologies among his top picks, alongside real estate marketplace Zillow.
Jun Bei Liu is the lead portfolio manager at Tribeca Alpha Plus Fund. Ms Liu is set to present an investment idea at the Sohn Hearts & Minds conference in Tasmania on November 18.
Desmond, who worked in London before moving to Australia in 2008, is making his first appearance at the annual Sohn Hearts & Minds Investment Leaders Conference, where fund managers give their favourite stock tips to raise money for medical research charities.
Regal’s hedge fund focused on the resources space has thumped the market and its top stock picker, Tim Elliott, says resources stocks are still cheap.
The WaveStone principal says retail will drop away but quality operators will find a way through.
Catherine Allfrey, Principal and Portfolio Manager of WaveStone Capital will be speaking at this year's Sohn Hearts & Minds Conference in Hobart which raises funds for Australian medical research.
There are many descriptors for Browder, including Russia’s anti-corruption crusader, and its most dogged oligarch hunter. But it’s his title as Putin’s No.1 foreign enemy that bestows on him another label - consummate survivor.
Bill Browder, once the largest foreign investor in Russia and the man behind the global Magnitsky justice campaign, says the US is the weakest link in the war in Ukraine.
Bill Browder, the fund manager who has become one of Vladimir Putin’s fiercest critics, says the Russian leader is increasingly desperate, but no less dangerous.
On November 18, Griffin – with $4.7bn under management at Munro Partners – heads to Hobart for this year’s face-to-face pitch to investors on his 2023 pick.
Tim Carleton, founder of Auscap Asset Management and 2022 Conference Fund Manager sat down with Equity Mates to discuss his investment philosophy and what makes a great Australian company.
When investor Kara Nortman and actor Natalie Portman decided to start a soccer team, they created a brand that has grabbed the sporting world’s attention.
Australia’s sports leagues are being held back by a culture of conservatism and need to be more open to private equity investment or risk falling behind, investors say, with Netball Australia’s rejection of a $6.5m bailout cited as just one example of administrators’ aversion to private capital. Conservative Australian sports leagues are ‘letting investment opportunities pass them'.
Sporting teams and leagues are becoming serious investments for global firms managing billions of dollars, as private equity funds eye off the sector’s growth potential and resilience to economic slumps.
Bill Browder, one of Russian President Vladimir Putin’s fiercest critics, the founder of Hermitage Capital and the man behind the Magnitsky Law on human rights, will headline this year’s Sohn Hearts & Minds investor conference.
A financier and political activist who is viewed as a key enemy of Russia’s government will address Australian investors on the war in Ukraine at this year’s Sohn Hearts and Minds conference, as the conflict continues to have a major influence on global markets.
Keynote speaker will be Bill Browder, the former Hermitage Capital hedge fund manager that has become an arch nemesis of Russian President Vladimir Putin, as he has lobbied governments to black-list senior Russian officials attempting to shift their assets offshore.
