By Baillie Gifford
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The podcast currently has 49 episodes available.
Upheaval can create opportunity. Baillie Gifford’s Japan Team seeks out companies that will derive the greatest long-term benefit from transformational forces impacting business and broader society. In this podcast, investment manager Matthew Brett identifies four ‘structural growth’ drivers and the portfolio companies taking advantage of them.
Background:
Matthew Brett is the investment manager of The Baillie Gifford Japan Trust and our Japanese Fund, as well as co-manager of the Japanese Income Growth Fund. In this episode of Short Briefings on Long Term Thinking he discusses four forces creating long-term growth opportunities:
- Japan’s late embrace of digitalisation
- the rising spending power of its Asian neighbours
- the accelerated adoption of industrial automation
- the unmet health needs of an ageing population
Brett also names some of the Japanese companies driving these changes or otherwise gaining advantage, including ecommerce conglomerate Rakuten, skincare beauty firm Shiseido, machine vision specialist Keyence and Alzheimer’s drug developer Eisai.
Resources:
Japan: the next opportunity
Kohei Saito: Slow Down – How Degrowth Communism Can Save The Earth
Companies mentioned include:
Calbee
DMG Mori
Eisai
Keyence
KOSÉ
PeptiDream
Rakuten
Shiseido
SoftBank
Timecodes:
00:00 Introduction
1:45 From psychology to investment
2:25 Changing Japan
3:15 Japan’s distinguishing market characteristics
4:15 Visiting companies and other equities research
6:00 Performance versus the TOPIX
8:00 Defining digitalisation
8:30 Leaving paper behind
10:15 Rakuten’s online enterprise
10:50 The advantage of QR barcode payments
11:30 Rakuten’s loyalty points scheme
12:25 Accelerating automation and industrial robots
13:30 DMG Mori’s precision machines
14:40 Keyence and robotic vision
16:40 China’s chance of catch-up
17:40 Rising wealth of Japan’s Asian neighbours
19:00 Shiseido’s skincare advantage
20:10 Unmet healthcare needs of an ageing population
21:30 Testing further uses for Eisai’s Alzheimer’s drug
23:30 PeptiDream’s synthetic peptides
24:00 Using AI to put peptides to use
25:10 Calbee’s continued innovation
26:00 Book choice
28:50 Conclusion
Sometimes, you have to take a step back to leap forward. Over the past couple of years, Meta, Amazon, Block and Shopify are among the growth companies to have made efficiency cuts following the pandemic. Gary Robinson, an investor in Baillie Gifford’s US Equity Team, says that’s made them more agile and resilient – qualities that will let them take advantage of artificial intelligence and other opportunities to drive long-term growth.
Background:
Gary Robinson is joint manager of the Baillie Gifford US Growth Trust, a manager of the American Fund and a partner in our firm. In this episode of Short Briefings on Long Term Thinking, he explores how four leading internet-focused firms have streamlined their operations and reallocated resources to become more adaptable during a period of rapid change.
Robinson draws a parallel with companies that made cutbacks after the global financial crisis to suggest that the markets may have underestimated how much growth can be unlocked by leaders taking a hard look at their firm’s spending, organisational structure and business priorities.
Robinson suggests that recent efficiency drives will help Shopify, Meta and Amazon pursue AI-related opportunities that could meaningfully increase their earnings. And at Block, efforts to bring two products closer together could help the firm challenge Visa, Mastercard and American Express.
Resources:
Behind The Tech: Tobi Lütke: CEO and Founder, Shopify
Dwarkesh Podcast: Mark Zuckerberg – Llama 3, Open Sourcing $10b Models & Caesar Augustus
Bent Flyvberg: How Big Things Get Done
Cyril Northcote Parkinson: Parkinson’s Law, and Other Studies in Administration
More from Gary Robinson:
Lessons from evolutionary biology
Why companies should embrace chaos
Companies mentioned include:
Amazon
Block
Meta
Netflix
Shopify
Timecodes:
00:00 Introduction
01:40 A background in biochemistry
02:55 The appeal of American companies
03:30 Parallels with the global financial crisis
04:40 Post-Covid efficiency efforts
06:25 Addressing overhiring and patched-together processes
07:40 Future-proofed businesses
08:00 The potential of AI
08:10 Shopify and the distraction of side quests
10:45 Shopify’s Sidekick assistant
12:50 Engineering Shopify’s internal operations
14:20 The authority of founder-leaders
16:00 Meta’s ‘year of efficiency’
18:00 How AI can drive further growth at Facebook and Instagram
20:10 Business chatbots on WhatsApp and Messenger
21:15 Investing in Block
22:30 Capping employee numbers without compromising growth
24:40 Square and Cash App’s potential to rival Visa and Mastercard
26:35 Meeting Jack Dorsey
27:40 Discipline and focus at Amazon
29:00 Amazon’s fast-growing advertising business
30:20 Generative AI’s trillion-dollar opportunity for AWS
31:25 Offloading routine tasks to artificial intelligence
32:25 Book recommendation
33:40 Outro
Emerging markets have sometimes promised more than they have delivered, but circumstances may be tipping in growth investors’ favour. Will Sutcliffe, head of our Emerging Markets Team, explains why it’s an opportune time to invest in the asset class.
Background:
Will Sutcliffe is the head of Baillie Gifford’s Emerging Markets Team and co-manager of our Emerging Markets Leading Companies Fund. In this episode of Short Briefings on Long Term Thinking, he brings his 23 years of experience in the field to explain what makes the specialism different from other types of growth investing.
He makes the case that finding exceptional growth companies at attractive valuations is only part of the equation. Investors must be mindful of the broader macroeconomic environment, he explains, to avoid getting caught out by currency swings or spiralling debt costs. This leads him to conclude that recent resilience in emerging market economies could point to a favourable outlook for the asset class’s growth stocks.
All this only matters to our portfolios if there are exceptional businesses to invest in, and Sutcliffe argues that the emerging markets are home to an increasing number of world-class companies. They range from the Taiwanese chip maker TSMC to the energy, retail and telecoms conglomerate Reliance Industries.
Resources:
Emerging markets: why bother?
Stock story: Pinduoduo
South-east Asia’s rising export stars
Jio Financial Services
Natura
PDD Holdings
Pinduoduo
Reliance Industries
Temu
TSMC
Gabriel Garcia Marquez: Until August
Timecodes:
00:00 Introduction
01:45 Joining the Emerging Markets Team
03:15 A ‘terrifying’ baptism of fire
05:00 Emerging markets’ ‘dirty little secret’
05:45 Qualifying for emerging markets status
06:45 Higher-calibre companies
08:00 Macroeconomic resilience
09:30 US-China tensions and Russia’s invasion of Ukraine
12:00 Investing in China
13:45 PDD Holding’s Pinduoduo and Temu
A new medicine that can help patients lose 15 per cent of their body weight could have far-reaching consequences for healthcare. Wegovy mimics a hormone the gut releases, reducing appetite and slowing digestion to delay hunger’s return. Research is also underway into other potential health benefits.
In this podcast, Baillie Gifford investment manager Ross Mathison discusses its maker, the Danish pharmaceuticals manufacturer Novo Nordisk, which became Europe’s most valuable company in 2023.
Background:
Ross Mathison is an investment manager in our Global Income Growth Team, co-manager of our Global Income Growth Fund and deputy manager of the Scottish American Investment Company (SAINTS).
In this episode of Short Briefings on Long Term Thinking, he discusses how medicines that mimic the glucagon-like peptide-1 (GLP-1) hormone could help tackle the growing problem of weight gain. Forecasts suggest that by 2035, more than half the world’s population will either be overweight or obese. That’s likely to lead to more people suffering associated diseases, putting health budgets under further strain.
Novo Nordisk initially researched GLP-1s as a diabetes treatment. The company is the world’s biggest insulin producer, but it’s the release of its weight-loss drug Wegovy that’s transformed its growth prospects. News that medical trials suggest that the therapy could also reduce the likelihood of heart attacks, strokes and other cardiovascular threats among some patients has driven further investor interest.
Mathison explains that there could be further health benefits beyond this, how even more effective treatments could follow and why Novo Nordisk’s manufacturing edge and connection to the world’s biggest charitable foundation bode well for its future.
Resources:
New England Journal of Medicine: Semaglutide trial
Novo Nordisk cardiovascular trial press release
Novo Nordisk kidney trial press release
Novo Nordisk Foundation
Wegovy
World Health Organization obesity factsheet
Hitting Against the Spin
Timecodes:
00:00 Introduction
1:40 What are GLP-1s?
4:00 Scientific breakthrough
5:05 Obesity: a disease, not a choice
6:45 Novo Nordisk’s drug, Wegovy
08:10 Prescription costs
What distinguishes companies that will thrive from those that will perish? In this episode, we explore three traits that mark out the companies set to surge ahead from those more likely to struggle:
1. They solve real-world problems
2. They are financially strong and disciplined
3. They are highly adaptable
Baillie Gifford partner Tim Garratt discusses these characteristics, gives examples of companies that exhibit them and explains why this feels like a once-in-a-generation opportunity to be a long-term growth investor.
Background
Tim Garratt is an investment specialist, overseeing the institutional clients who invest in our Long Term Global Growth strategy and leading our broader client specialist network.
He recently co-authored the paper Why growth, why now?, which reaffirms our beliefs about how growth investing can generate attractive returns.
In this episode of Short Briefings on Long Term Thinking, he discusses how interest rate rises, restricted amounts of capital and geopolitical tensions are causing a stock market shake-out. And he explains why this plays to the advantage of patient investors who focus on the fundamentals when picking growth stocks.
Garratt gives examples of how companies, including Netflix, Roblox, Shopify and Amazon, fulfil the criteria we seek. And he explains how Baillie Gifford itself is adapting to the times, exploring the use of machine learning and other tools to hone our investment process.
Resources:
Why growth, why now?
We’re all climate hypocrites now
See & Spray
Netflix engagement report
Timecodes:
00:00 Introduction
1:30 From abundance to limitation
03:45 Implications for investors
05:20 Real world problems: supply chains
07:30 Deere and hi-tech farming
09:00 Financial strength and discipline
09:50 Netflix and pricing power
12:00 Keeping watch on margins
14:15 China’s electric vehicle makers
16:15 Adaptability and new business models
16:50 Roblox adds AI
19:30 Microsoft, Amazon and environmental costs
21:45 Sea and the importance of culture
23:00 How Baillie Gifford is adapting
25:05 ‘Why now?’ for growth investing
26:55 Book choice
Show notes
Amazon and DoorDash take different approaches to bridging the physical and digital worlds. Amazon has built an extensive infrastructure of warehouses, logistics networks and data centres to directly control its operations. DoorDash instead relies on partnerships with restaurants and stores for deliveries, limiting its capital investment. In this podcast, Baillie Gifford investment manager Kirsty Gibson analyses the advantages of each model and how both approaches can pose a disruptive challenge to more traditional businesses.
Amazon and DoorDash exemplify two distinct approaches to rooting a business in both the physical and digital worlds. Amazon has done so by investing deeply in physical infrastructure, including its vast logistics operations and data centres. DoorDash, by contrast, has focused on partnering with others to offer meal and grocery deliveries. Baillie Gifford investment manager Kirsty Gibson explores the merits of each approach and discusses how the two companies and others like them can pose a disruptive challenge.
Background
Kirsty Gibson is an investment manager in Baillie Gifford’s US Equity Growth Team and is joint manager of the American Fund and US Growth Trust.
In this episode of Short Briefings on Long Term Thinking, she explores how a growing number of companies are posing a challenge to incumbents by innovating in both the digital and physical realms. The podcast draws on an interview she gave as part of Baillie Gifford’s Disruption Week 2023 event.
In addition to discussing how Amazon and DoorDash put this into practice, Gibson also discusses the chemicals maker Solugen, self-driving lorries pioneer Aurora and electric car maker Rivian, among others.
Resources:
Where software meets steel
Disruption Week 2023 articles and videos
Growth waves: supporting companies and spotting opportunities
Past podcasts
Timecodes:
00:00 Introduction
1:30 Historical background
4:21 Capital-intensive and capital-light approaches
5:31 How Amazon blends its physical and digital operations
8:33 Rivian’s electric pickup trucks
9:57 Solugen: making chemicals with software
13:39 DoorDash’s capital-light approach
15:45 DashMart distribution centres
17:28 Aurora’s autonomous trucking business model
20:30 Reinvesting in Meta
23:25 Investing with conviction
24:18 Ginkgo Bioworks’ potential
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Companies mentioned include:
Alphabet
Amazon
Aurora Innovation
DoorDash
Ginkgo Bioworks
Meta
Netflix
Rivian
Solugen
Tesla
Twilio
China became known as the world’s factory thanks to it offering companies a way to manufacture all kinds of goods at a high quality and relatively low cost. But in recent years, south-east Asian nations, including Vietnam and Indonesia, have begun challenging it for that status. Baillie Gifford investment manager Ben Durrant recently returned from a tour of the region. He discusses some of the long-term growth opportunities he unearthed on his trip.
Background
Ben Durrant invests on behalf of the Pacific Horizon Investment Trust, the Pacific Fund, and our Emerging Markets Equity Team. In this latest episode of Short Briefings on Long Term Thinking, he explores the factors that led China to become the world’s leading exporter and how its move up the value chain is now creating opportunities for other south-east Asian countries to grasp. Durrant reviews some of his most memorable encounters in Vietnam, Indonesia, Malaysia and Thailand and reveals which growth companies excited him the most. They include businesses using mined metals to make car batteries, banks serving populations with growing spending power and, perhaps surprisingly, one of the world’s leading catfish exporters.
Resources:
The Indonesian companies powering the green transition
Ben Durrant LinkedIn page
How Asia Works
How the World Really Works
Past podcasts
Timecodes:
00:00 Introduction
01:30 China’s success as a low-cost exporter
03:15 Land reform’s role
04:00 Good quality, low-cost labour
05:45 South-east Asian countries’ advantage
07:15 Vietnam’s growth opportunity
09:30 Vin Hoan: exporting catfish
11:45 Sourcing local insights
13:30 Indonesia’s move up the value chain
16:15 Clusters of expertise in Malaysia
18:00 Looking beyond tourism in Thailand
20:15 Moving up the value chain
22:15 The attraction of growth investing in southeast Asian
23:15 Paying attention to macroeconomics
24:30 Book recommendation
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Companies mentioned include:
FPT
Hyundai
Samsung Electronics
Vinh Hoan
Is the time ripe for Japanese growth stocks? Donald Farquharson is Baillie Gifford’s head of Japanese equities and knows the market better than most. In the latest episode of Short Briefings on Long Term Thinking he draws on a recent visit to the country to explain why conditions seem favourable for a cohort of domestic companies with long-term mindsets.
Background
There’s a sense of renewed confidence and enthusiasm in the air in Japan. The country is home to the world’s second-largest market for equities after the US, but it doesn’t get a corresponding degree of attention from international investors.
The reason is partly because of the nation’s past weak economic performance. But a recovery is underway, and critically, many of its growth stocks have strong balance sheets, big ambitions and a positive story to tell.
In this episode, Baillie Gifford partner Donald Farquharson draws on his experience of investing in Japan since 1990 to explain why he’s particularly optimistic about the opportunities ahead for a select group of companies. They include the medical equipment maker Olympus, the car components manufacturer DENSO and the takeover advisory service Nihon M&A Center.
He also shares why he thinks some misunderstand Japan and why it’s no coincidence that many of the companies he backs are founder-run.
Resources:
Discovering the unsung superstars of Japanese technology
From Yahoo! to Z Holdings: the evolution of an online pioneer
Japan: the small businesses with big opportunities
Investing in Japan: distance lends perspective
Donald Farquharson’s LinkedIn page
Aiming High: Masayoshi Son, Softbank Group and Disrupting Silicon Valley
Past podcasts
Timecodes:
00.00 Introduction
01:40 Investing in Japan in the 1990s
03:00 ‘Undiscovered’ Japan
03:55 How banks and other businesses changed
05:30 A sustainable recovery?
06:45 An exciting time for growth companies
07:45 Strong balance sheets
08:15 Olympus and endoscopes
09:45 Diversity on the board
11:00 Nihon M&A Center and company takeovers
12:50 DENSO, a major supplier to Toyota and others
14:30 Toyota City, home to one million people
15:35 Competition for car batteries
16:30 Baillie Gifford’s advantage in Japan
17:45 Looking beyond the headlines
18:20 Book recommendation: Masayoshi Son and Aiming High
19:45 Investing in founder-led firms
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Companies mentioned include:
DENSO
Koganei Country Club
Nihon M&S Center
Olympus
Panasonic
ROHM Semiconductor
Softbank
Toyota
What counts as a growth stock is ever-changing. Mark Urquhart shares lessons from 27 years of investing to explain how he decides what to buy and how long to hold as he continues his hunt for outsized returns.
Background:
In 1996, our largest investments included oil and gas companies and high street banks. These days, our biggest holdings specialise in computer chips, ecommerce and biotech. We still pursue long-term growth – companies we believe will reach their potential given time. But we find it in different places.
In this episode, partner Mark Urquhart explains how he tries to identify companies that can grow for a decade or longer, allowing their sales, profits and share prices to compound along the way. He discusses the changing nature of the businesses that qualify and what gives him the confidence to back maverick founders. Other topics he covers in conversation with managing editor Malcolm Borthwick include lessons from the pandemic and the growth companies that most excite him today.
Resources:
The changing face of growth
Four cardinal questions for growth investors
Mark Urquhart’s LinkedIn page
1599: A Year in the Life of William Shakespeare
Past podcasts
Timecodes:
00.00 Introduction
1:20 Joining Baillie Gifford in the pre-Google era
03:45 An evolving attitude to growth companies
05:20 Looking for stronger compound growth
06:35 Investing in Microsoft
08:00 The quest for companies like Hermès
09:55 Learning to be open-minded in Japan
12:10 The importance of mavericks
13:40 How Tesla hit its targets
14:40 Investing in times of crisis
17:35 What the Covid pandemic teaches growth investors
23:05 Today’s most exciting growth companies
25:15 Book recommendation
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Companies mentioned include:
Alphabet (Google)
Apple
ASML
Dexcom
Don Quijote
Hermès
MercadoLibre
Microsoft
Netflix
Peloton
SpaceX
Tesla
The podcast currently has 49 episodes available.
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