Magic Markets #80: Hot Stocks vs. Hot Air

In growth investing, you’re often buying a piece of technology that has the potential to become a wonderfully profitable commercial operation. Sometimes, these businesses aren’t profitable yet. This creates a different risk profile for investors vs. value stocks, which investors look to for near-term cash flows. The investment styles are different and so the approach needs to be different.

Together with the team at AnBro Capital Investments, we’ve been learning about growth investing with examples of specific stocks. We also try to unpack how the team separates hot stocks from hot air. In this episode, we briefly touch on the disaster of Theranos as a case study for the risks in this space. The team explains the approach taken to mitigate these risks in the Unicorn portfolio.

We also looked at two fascinating examples of stocks in the healthcare industry. Dexcom offers continuous glucose monitoring technology, which anyone who has experienced diabetes first-hand will appreciate. Hanger offers orthotic and prosthetic services with a business model built around support for patients who have gone through the trauma of losing a limb.

Hanger talks about “empowering human potential” and that’s a great summary for the focus of growth investing. The volatility isn’t for everyone, but the long-term stories are certainly exciting.

Episode 80 of Magic Markets is brought to you by AnBro Capital Investments, an authorised Financial Services Provider FSP number 48371.

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