The following is an excerpt from our recently published SWS Growth Equity 4Q strategy update, which is available in its entirety here. In the full piece, we provide our take on thinking through various sources of macro uncertainty as investors, in addition to assessing the strategic merits of our internally managed strategy for public growth-style equity.
Coming off a recession-triggering year in the throws of a global health crisis creates a challenging backdrop for any market forecaster. In effort to chart our forward path, we find it helpful to borrow from our fundamental investment process, seeking simplicity among chaos. Here, we isolate our investment premise: exploiting the market’s inefficiency of pricing long-term competitive disruption, specifically that which is enabled by disruptive innovation. As we study the evidence that’s filtered through the macroeconomic noise, it’s clear that the global pandemic response accelerated many mis-pricings that we were readily poised to exploit in 2020. As we study the opportunity landscape going forward, we also see ample runway for attractive excess returns over the coming years.