Curious about Zevenbergen Capital’s investment perspective? Check out an excerpt from our quarterly client letter for our thoughts on 2Q19 and the road ahead.
2Q19 Equity Review & Perspective
The Pain Trade: This year’s market gains have (for the most part) been accompanied by marked degrees of skepticism. Even as equities hover near record highs, many investors remain pessimistic. For the time being, the pain trade (for those not positioned to participate), is for stocks to march upward. The more the market appreciates, the more pressure there is to invest, driving prices even higher. Perversely, calls for a recession are mounting. Investors anticipating interest rate cuts in the months ahead have become inversely sensitized to economic news supporting continued economic expansion. In reality, the cyclical landscape may be slowing, but still growing. Against this backdrop, companies with strong growth characteristics should be favored, as growth becomes more scarce. Stock selection remains key in this differentiated environment, playing to ZCI’s strengths. The quantum, variety and accuracy of information we are all exposed to every day is vast; identifying and separating facts from financial motives can be challenging. ZCI focuses on developing critical analysis to understand what is true. Drilling down to the most important questions and knowing how to uncover insights are skills we constantly refine. Creating long-term value for clients and investing for the future should not be built on shifting sands of boom and bust, rather on the bedrock of real, long-term fundamentals.