We have been wrong before. We will be wrong again.
That is not just a disclaimer. It is the foundation of how we think about investing and how we strive to get better.
Growth equity investing requires conviction, but conviction without humility is just stubbornness. Many of the successful investment decisions we have made have come from a willingness to keep learning: about a company, about an industry, about our own analytical biases.
We recognize that we will never have complete information on any given decision. Every decision, including not to act, is based on an inherently uncertain future. We act on the best available evidence rather than wait for certainty that never comes and are open to changing our minds when the core facts change.
We process new information every day, whether about a company, stock, industry, economy, or region. We seek to manage the risk of the unknown through position sizing or deciding to pass on a prospective investment entirely.
These hard-earned lessons have been specific:
- Share prices can detach dramatically from business execution in the short term.
- Incumbent industries are more durable than they appear.
- High entry prices leave little margin for error.
- Visionary founders are not necessarily infallible stewards of capital.
- Durable businesses require positive unit economics and a visible path to increasing profitability and cash flow.
- Holding is an active decision; staying invested carries the same burden of conviction as buying.
We work to minimize these risks, but errors and the resulting learnings are part of the process. We will not get every decision right. Baseball offers a useful analogy. A high hit rate, being right more often than wrong, sounds appealing. In investing, frequency of correctness matters less than magnitude. A portfolio that is right 40% of the time but generates outsized returns on those wins will outperform one that is right 60% of the time but earns modest gains. We focus on slugging percentage, the size of the outcome when we connect, in pursuit of investments that can truly move the needle.
Humility in investing is not about lacking confidence. It is about staying curious, staying honest, and never stopping the work of improving our judgment.
Our history has given us a lot to learn from. We intend to keep learning.
Investing in securities involves the risk of loss. Past performance is not a guarantee of future results. The securities identified and described do not represent all the securities purchased, sold, or recommended for clients’ accounts. The reader should not assume that an investment in the securities identified was or will be profitable. This material is intended for general informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. It does not consider the specific investment objectives, tax and financial condition or needs of any specific person. This content is developed from sources believed to be providing accurate information. While reasonable care has been taken to ensure that the information herein is factually correct, Zevenbergen Capital Investments makes no representations or guarantee as to its accuracy or completeness. The opinions expressed herein are subject to change at any time without notice.
