Quality Growth Investor Conference

Quality Growth Quarterly Issue 1

Quality Growth Quarterly

To mark the launch of the inaugural Quality-Growth Investor Conference, we are launching a similar publication to "Value Investor Digest" which is now in its 45th issue. Each issue will feature articles relating to quality-growth investing, about the managers at our upcoming conferences, plus other articles of interest to investors. In the first issue we feature a data-driven Goldman Sachs report titled "Measuring the Re-opening of America", a WSJ piece on the potential for the economy to have a "Swoosh-Shaped Recovery", the FT reveals an earnings-flattering new pandemic reporting method called "EBITDAC", plus we feature interviews with Rajiv Jain of GQG Partners and James Anderson of the Scottish Mortgage Investment Trust and 10 other articles.


Inaugural London Quality-Growth Investor Conference Postponed until Spring 2021

  Facebook vs Google

The New Dot-Com Bubble is Here: Online Advertising

"What was the effect of pulling the ads? Almost none. For every dollar eBay spent on search advertising, they lost roughly 63 cents. To the marketing department everything had been going brilliantly. The high-paid consultants had believed that the campaigns that incurred the biggest losses were the most profitable: they saw brand keyword advertising not as a $20m expense, but a $245.6m return."

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  James Anderson

Scottish Mortgage Manager Blames Buffett for Value 'Tragedy'

"...the clear evidence of the power of the internet, the increasing returns to scale it tends towards and the consequent deep competitive moats it offers. As Buffett’s brilliant partner, Charlie Munger, puts it with the clarity of a 96-year-old. Too many investors are ‘like a bunch of cod fishermen after all the cod’s been overfished..maybe they should move to where the fish are.'"

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  Rajiv Jain CityWire Selector Interview

Strategically Speaking: GQG Partners

"Rajiv Jain is well aware of the immense human and economic toll of the COVID-19 pandemic but from the particular perspective of GQG Partners he sees it as a positive. As an employee-owned boutique asset manager, it is in his view inherently more resilient than many other investment firms. He declines to name names, but he sees the business models of many as under threat."

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Why the Economic Recovery Will Be More of a ‘Swoosh’ Than V-Shaped

“Until recently, many policy makers and corporate executives were hoping for a V-shaped economic recovery from the coronavirus pandemic: a short, sharp collapse followed by a bounce back to pre-virus levels of activity. Now, however, they expect a “swoosh” recovery. Named after the Nike logo, it predicts a large drop followed by a painfully slow recovery.”

Read more


Pandemic Spawns New Reporting Term ‘EBITDAC’ to Flatter Books

"Companies have always strived to present their financial results in the most flattering light. Now some are going a step further, presenting a new customised metric they are calling ebitdac: earnings before interest, tax, depreciation, amortisation — and coronavirus."

Read more

  GS Granolas

Move Over, FAANGs. Goldman Unveils Europe’s ‘GRANOLAS’ Stocks

"Goldman Sachs, in a new research note, says the so-called GRANOLAS have been the stars. The new acronym stands for GlaxoSmithKline, Roche Holding, ASML, Nestlé,, Novartis, Novo Nordisk, L’Oréal, LVMH, AstraZeneca, SAP and Sanofi."

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  GS Reopening America

Goldman Sachs: Measuring the Reopening of America

"Verizon management noted that their Consumer segment saw some change in activity as government stimulus checks came in, including a greater inflow of payments and some early signs of increased retail volumes (gross adds and upgrades). PayPal saw a 135% y/y increase in net new active accounts as holdouts in the digitization of money were forced to find alternatives to cash."

Read more


Sustainable Growth Advisers: Committed To Cognitive Diversity

“Diversity is a foundational principle at SGA for two reasons: cognitive diversity enhances the probability of investment success, and diversity is the clearest sign of meritocracy. Seven of SGA’s investment committee (IC) members were born and raised outside the United States, eight speak a second language fluently, and eight studied abroad."

Read more

  Ryanair Proposes No-Fare Tickets Within a Decade

Ryanair Proposes No-Fare Tickets Within a Decade

Michael O’Leary said: “I’ve long held the view that airports are just shopping malls and I’ve, therefore, never understood why we should be charged for delivering people to shopping malls. The flights will be full, and we will be making our money out of sharing the airport revenues, [out] of all the people running through airports, and getting a share of the shopping and the retail revenues."

Read more

  Air France

Now Is Not the Time to Throw Money at Airlines

“Governments should not offer the instant bailouts airlines had begun to call for. As Michael O’Leary of Ryanair has angrily pointed out, survival prospects for European operators are already being distorted by ‘subsidy junkies’ such as Air France and Lufthansa ‘hoovering up state aid’ — while Spain lobs a billion euros into Iberia and Vueling, sister companies of British Airways in the IAG group.”

Read more

  EU vs Germany

Sue the Germans? A Power Struggle Between the EU and its Biggest Member

"Germany’s constitutional court decided last week it wouldn’t follow a 2018 judgment by the EU Court of Justice that cleared the central bank’s debt purchases, totaling 2.7 trillion euros since 2015. German opponents of euro-area bailouts...repeatedly challenged the policies in the country’s courts, which until last week broadly went along with the rescue measures.”

Read more

  Amazon Basics

Amazon Used Data From 3rd-party Sellers to Make its Own Products

“Amazon employees say they have used data from third-party sellers to inform their production of competing products, bucking the company's long-standing claims to Congress and regulators that it doesn't. More than 20 former Amazon employees said they had collected and accessed individual sellers' information to figure out which products they should make under its private labels.”

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  Jack Welch

Harvard Business Review: Jack Welch's Approach to Leadership

"Jack Welch was heralded by many as the greatest leader of his era. As CEO of General Electric from 1981 to 2001, he transformed it from a company known for appliances and lightbulbs to a multinational corporation that stretched into financial services and media as well as industrial products.”

Read more

  Alibaba’s Hotel of the Future

Alibaba’s Hotel of the Future

“I recently stayed at Alibaba’s futuristic FlyZoo hotel, which is adjacent to its headquarters in Hangzhou, China. Here, there are no keycards and everything is cashless. It features facial recognition doors, robotic arms at the bar and even robots that deliver items to guest rooms. Alibaba hopes the property will be a model for what a hotel of the future may look like.”

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  Booking Holdings

Booking Holdings CEO says a Coronavirus Vaccine is Needed to Make Travelers Feel Safe Again

“I think no one is going to feel comfortable, fully comfortable, traveling until they can feel that they are safe and that requires either, perhaps we’ll have a vaccine — hopefully not long from now — or an effective treatment would help. Until that happens, I think people are going to be concerned about travel.”

Read more

  FT Smart Industry

Tomorrow’s Industries Will Be More Sustainable (and much more profitable).

“Whether you call it Industry 4.0, the Industrial Internet of Things, or Smart Manufacturing, the power of technology is being felt throughout the industrial world, fundamentally changing value-chains and production methods...Capgemini’s Digital Transformation Institute predicts that smart manufacturing could add as much as $1.5 trillion to the overall output of the industrial sector.”

Read more

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  • ““Growth is always a component in the calculation of value, constituting a variable whose importance can range from negligible to enormous and whose impact can be negative as well as positive”

    Warren Buffett
  • “Growth and Value are joined at the hip”
    Joel Greenblatt
  • “I don’t love Ben Graham and his ideas the way Warren does…Ben Graham had a lot to learn as an investor”
    Charlie Munger
  • “Growth and Value are joined at the hip”
    Joel Greenblatt
  • “I am so tired and fatigued with this ‘growth versus value’ argument”
    Robert Hagstrom
  • “Graham & Dodd investors are people who place a very high price on having the last laugh. In exchange for that privilege they have missed out on a lot of laughs inbetween.”
    Michael Lewis

  • “By what principle is it that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?”

    Thomas Babington Macaulay

  • “The stock of a growing company, if purchasable at a suitable price, is obviously preferable to others.”

    Benjamin Graham

  • “It is natural and proper to prefer a business which is large and well managed, has a good record, and is expected to show increased earnings in the future. But these expectations, though seemingly well-founded, often fail to be realized. Many leading enterprises of yesterday are today far back in the ranks. Tomorrow is likely to tell a similar story.”

    Benjamin Graham and David Dodd
  • Questioner:
    “I keep hearing people like Doug Kass say that buy and hold
    investing is dead. Do you think that’s true?”
    Warren Buffett:
    “Well, it depends what you buy and hold.”
  • “The Stock Market is designed to transfer money from the Active to the Patient.”
    Warren Buffett
  • “As time goes on, I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes.”
    John Maynard Keynes
  • “The whole ‘growth and value’ debate I personally feel is nonsensical in a way because why would you consciously overpay for anything?”
    Rajiv Jain
  • “Rapid growth can be a misleading indicator of added value because it can be generated simply by pouring capital into a business.”
    G. Bennett Stewart
  • “Investment is most intelligent when it is most business-like”
    Benjamin Graham