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The hunt for multi-baggers in a sea of skepticism
I happened to re-read one of my favorite investing essays this week, Use Your Edge, written by Peter Lynch in 1997. I wanted to share it here for a couple of reasons. First—I think offers a few timeless lessons about investing in growth stocks from one of the greats. Second—despite being written 25 years ago, I think his ideas about exponential growth curves are only becoming more relevant in a post-Internet, post-smartphone era. My view is that we’re living through a unique period of industrial consolidation that will lead to winner-take-all dynamics. This landscape has created a fertile environment to hunt for multi-baggers, especially when consensus turns skeptical about the future growth of a company that is just hitting its stride. “In the 1970s I got interested in McDonald’s,” Lynch writes. “A chorus of colleagues said golden arches were everywhere and McDonald’s had seen its best days.” He continues:
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The intrinsic motivation that drives the people behind the most successful companies
Ravi Gupta, a partner at Sequoia and former Instacart CFO, shared a great little anecdote in a conversation this week with Patrick O’Shaughnessy. Gupta recounts being interviewed by Mike Moritz when he was up for the job at Instacart. At first, the questions were normal fodder for an executive interview—but Moritz quickly pivoted to a near-philosophical line of questioning about the meaning of relationships, family, and the motivations for success.
As Gupta recounted, “So later I asked Mike… ‘Did you just ask me those questions, or do you ask them of everyone?’ He said, ‘Oh, I ask them of everyone. ‘I said, ‘Why?’ And he’s like, ‘Look, I think that the only thing that endures is the intrinsic motivation, and I think understanding the source of that is critical. Why does it matter if you succeed? What is the thing that keeps you going?” Gupta continues:
A few more links I enjoyed:
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