The 3 characteristics of great growth companies

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

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