176. Why the shine has come off Amazon, PayPal and Meta

Stephen Yiu, manager of LF Blue Whale Growth fund, talks to us about why he has never held Netflix or Zoom and why he thinks they are struggling today. He also gives his reasons for selling out of Amazon, PayPal and Meta recently and says what would need to change at Facebook for him to reinvest. He also discusses the opportunities in 5G and digital transformation, as well as the importance of pricing power and gross margins in today’s inflationary environment. He finishes by detailing new investment, Charles Schwab.

LF Blue Whale Growth fund has come storming onto the global equity funds scene since its launch in September 2017. It is a truly active fund with a very concentrated portfolio of just 25 to 35 stocks. The fund only invests in the highest quality businesses, although the manager pays close attention to valuations. He also ignores structurally challenged industries or businesses.

What’s covered in this podcast:

  • Why the manager thinks Netflix and Zoom are struggling
  • Why the manager has recently sold position in Amazon, PayPal and Meta
  • What could change at Facebook for the manager to consider reinvesting
  • The attraction of 5G as an investment theme
  • Why there are opportunities in the digital transformation
  • The importance of not only pricing power in an inflationary environment, but also the magnitude of that pricing power
  • Why gross margins matter for companies
  • Why the manager added Charles Schwab to the portfolio last year
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