Stephen Yiu of Blue Whale talks

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8th Feb '23 by Paul Hill

4 comments 981 reads

In this interview, Stephen Yiu of Blue Whale Growth Fund takes me through:

Outlook for equities. Start
Valuations. 01:35
Investment strategy & portfolio construction.02:50
Canadian Natural Resources. 05:20
Dexcom. 09:45
When to take profits. 12:40
Sartorius. 14:50
Veeva Systems. 18:35
Autodesk. 21:55
Nvidia. 25:25
ASML Holdings & Lam Research. 28:25
Canadian National Railway & Union Pacific Corp. 31:50
Kering. 36:25
Charles Schwab. 38:40
Mastercard & Visa. 42:30
Microsoft. 43:35
UK largecap growth. 47:35
How to invest in Blue Whale. 50:05

Disclosure: No conflicts

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About the Author

Paul Hill

Premium Member

4 comments

BnB

8th Feb '23

Thank you for the video.

I have outsized positions in all of these tech and payments companies, except Nvidia (see below), plus Sartorius and Veeva. So I wouldn't argue with the composition of the fund. However, just as I grumbled on the recent thread, I felt this was a puff piece with no challenge on valuations. It would have been interesting for you, Paul, to have debated in more depth with Stephen whether valuations in tech are now more reasonable - my view is that they reflect the cost of capital today fairly closely, but I am a tech investor accustomed to high price/sales ratios and growth strategies that eschew short term profitability (to my cost in 2022). What does a GARP investor make of today's prices?

But I'd make a special case of Nvidia. No one doubts that its GPUs will become ever more sought after. But it's a business with gross/ebitda margins of 60%/30% on price to sales of 20x !! When software companies with superior gross/ebitda margins of 80%/40% in 2021 were on price to sales of 20x, doubters, correctly, decried it as madness. Why is Nvidia any different suddenly?

Paul Hill

9th Feb '23

Love the feedback BnB. Many thanks

BTW, please feel free to drop Stephen a separate note/email wrt Blue Whale's valuations.

As I'm sure he'd like to debate your concerns directly - ie rather than via a layman like myself, who simple would get in the way.

Rusty2

24th Feb '23

Autodesk (NSQ:ADSK) I see are down over 10% despite beating analysts forecasts.

BnB

24th Feb '23

Autodesk (NSQ:ADSK) I see are down over 10% despite beating analysts forecasts.

All of US software is down 5% today on inflation worries, so this is really a 5-6% fall, almost exactly in line with the reduction in guidance for the coming FY.

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Stephen Yiu of Blue Whale talks "Beautiful" companies

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About the Author

Paul Hill

4 comments

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