Transcript:

It seems like the market is really focused on external factors that are very difficult to predict. And they might include what Mr. Trump is going to do next. It might be what the Federal Reserve is going to do next. But rather than focusing on these external factors that are very difficult to predict, we believe it’s better to focus on the fundamentals, the trends that are going to outlast these external events.

Given the risks that may emerge and reemerge over the course of the next few years, it’s very important to invest in companies that are resilient through these events, whether it be a possible economic slowdown or additional tariffs—whatever that may be. The other thing is there are many trends out there that are probably going to outlast many of these fluctuations, so trends towards more healthy, organic, natural foods and beverage and lifestyles—these trends are likely to continue. Demand for clean energy—that’s another thing that’s likely to continue for a long time. Premiumization in many categories and sort of craft everything—these are also trends that are probably going to be long lasting. Players that can benefit from these megatrends are likely to do well.

I think the most important risk that we focus on today is disruption risk. Given the advent of online retailing and other new technologies, it’s become a lot easier for new entrants to come in in many areas. So, making sure that your investments aren’t exposed to these disruption risks is a really important thing we have in mind.

I think one of the things to think about in this lower-growth environment is that perhaps it used to be that, given higher growth, certain businesses just did well regardless. Whereas in the future environment, the premium for companies that invest shareholder capital wisely is going to be greater. So I think that’s an often-overlooked area of emphasis that’s going to be important in a low-growth world.