We invest in companies where we believe the business is stronger than the market currently gives it credit for, and where time can work in our favour. In some cases, that means owning dominant global platforms with durable long-term growth. In others, it means buying strong businesses when the market is too focused on short-term fears. Position size reflects both conviction and risk: the stronger, more durable, and more predictable the opportunity, the larger the position can be.
AMD gives us exposure to one of the most important long-term themes in the market: AI, data centres, and advanced computing. We invested because we believe AMD still has room to grow as demand for computing power rises and as the company continues to execute well. The market has often valued AMD with caution because of competition and the cyclical nature of semiconductors, which can create opportunity when the long-term growth path remains intact. We expect returns to come from revenue growth, margin improvement, and further progress in AI-related products. The position is meaningful because the upside is attractive. It has also grown into one of our larger holdings, and because the business is more cyclical than our most stable core companies, we are mindful of keeping that size in balance with the overall risk of the portfolio.
We own Adobe because it is one of the strongest software franchises in the world, with products that remain deeply embedded in professional workflows. We invested when market concerns around AI disruption pushed sentiment lower than we felt was justified by the strength of the underlying business. Our view is that Adobe still has a powerful brand, recurring revenue, and the ability to adapt its products as technology evolves. We expect returns to come from steady earnings, strong cash generation, and a recovery in market confidence if the company proves it can incorporate AI successfully. It is one of our larger holdings, reflecting the quality and the attractive valuation; even so, we are not adding at current levels while the market continues to debate the long-term impact of AI on creative software.
We invested in Salesforce because it remains one of the most important enterprise software platforms in the world, serving as core infrastructure for customer relationships, sales, and workflow management. The market has gone through periods of underappreciating its earnings power and margin improvement potential, especially while focusing on slower growth. Our view is that the company still has a valuable installed base and meaningful upside if it combines better efficiency with new AI-driven products. We expect returns to come from improved profitability, stronger monetization of its platform, and a re-rating if growth becomes more durable again. The position is sizeable because the upside is attractive, but still balanced given the execution required. Your own research notes describe Salesforce as under-owned enterprise AI optionality with momentum building
We own Alphabet because it is one of the highest-quality businesses in the world, with exceptional reach across search, video, mobile, and cloud. We invested because moments of market fear gave the chance to buy a business with huge cash generation and multiple growth engines at more attractive prices. In our view, the market can sometimes become too focused on disruption risk while underestimating how powerful and entrenched Google’s platforms still are. We expect returns to come from continued advertising strength, cloud profitability, AI monetization, and sustained buybacks. We regard Alphabet as a core-quality holding — one we are happy to build on weakness — combining scale, resilience, and long-duration growth better than most companies in the market.
We invested in Alibaba because we believe the market price has often reflected fear far more than business reality. It remains a major commerce and cloud platform, but sentiment around China, policy risk, and lower visibility have weighed heavily on valuation. That gap between business strength and market confidence is exactly what can create opportunity. We expect returns to come from stronger capital returns, stabilization in the core business, cloud improvement, and a recovery in sentiment if the environment becomes more predictable. The position is meaningful because the upside could be strong from today’s valuation, but it is kept under control because uncertainty is clearly higher than in our core US compounders.
We originally bought PayPal as a recovery-and-re-rating opportunity: a globally recognized digital-payments business with a large installed base, which the market had priced too pessimistically relative to its brand, relevance, and cash generation. That situation has since changed in an important way. PayPal has become the subject of takeover interest — including a proposed all-cash acquisition — so we now manage the holding as a special situation: its outcome depends mainly on whether an offer is agreed, improved, or withdrawn, rather than on the slower long-term turnaround. We therefore treat it differently from our core compounders — the position is kept deliberately contained, and our attention is on the risk and reward around the transaction itself rather than on long-term business growth.
We own Amazon because it combines two exceptional businesses: a global e-commerce and logistics platform, and one of the most important cloud infrastructure businesses in the world through AWS. We invested because we see a long runway for value creation across both segments, with the market at times underappreciating how much profitability can improve as scale increases. Returns should come from AWS growth, operating leverage in retail, advertising expansion, and stronger free cash flow over time. It is one of the stronger core holdings because the business is diversified, highly durable, and still capable of compounding for many years.
We invested in Duolingo because it has built one of the strongest consumer learning platforms in the world, with habit-driven usage, strong engagement, and real brand power. The market has at times worried that AI could weaken its edge, but our view is that product engagement, user data, and execution still give the company a valuable position. We expect returns to come from subscriber growth, monetization, product expansion, and the company’s ability to use AI to improve the experience rather than be displaced by it. The position is meaningful because the long-term growth runway is attractive, but it is sized below the biggest core holdings because this is still a younger, more volatile business. It also fits within your compounder bucket