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Nancy Zevenbergen is in the top 1% of investors over the past 5 years. She breaks down what she looks for in young companies — and shares 4 stocks she thinks could be market leaders 10 years from now.


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One could argue there is no one better at identifying growth potential in young firms than Nancy Zevenbergen.

It’s what gets her up in the morning.

“What gets me going everyday? Who are the next ones for the next decade? You’ve got these tech titans, the FAANMGs, who are doing great. But who are the next titans?” she said to Business Insider on Tuesday.

The numbers don’t lie: her performance put her in the top 1% of comparable investors over the past one-, three-, and five-year periods, according to Bloomberg data.

Chalk that up to the fact that she was an early investor in companies like Apple, Microsoft, and Amazon. 

But how does Zevenbergen do it? How does she know, well ahead of the crowd, that a firm will see massive growth? 

We spoke with Zevenbergen, the founder of Zevenbergen Capital Investments — which has about $5 billion in assets under management — about what she looks for in companies she chooses to invest in.

She said while numbers like sales forecasts matter, she puts the most emphasis on whether or not a company is founder-run. 

“I would much rather buy a company and go to a desert island for five years knowing that a founder was leading it, because their vision and their passion would drive the company through ups and downs,” Zevenbergen said. 

She also said she doesn’t pay as much attention to valuation at the time of a firm’s IPO as others, and said that high initial valuations don’t matter if she believes a company will double in growth in a decade’s time.

Further, she said her firm’s willingness to look to the future has set them apart. She cited an anecdote about how the bank she was employed at handled Microsoft’s IPO as a turning point in her career — when she realized many in finance were slow to adapt to changing technology. 

“[My] bank’s trust department participated in the Microsoft IPO and we sold it the same day because it went up $0.25,” Zevenbergen said. “And what I realized is that the generation that I was learning the business in was not comfortable with new technologies, and Microsoft was the new technology at the time.”

She added: “It kind of formed my belief because as an investor: I’m not trying to make a day trade, I’m saying I’m going to put my money with someone or something that can grow ahead of everything else in this world.”

To help identify which new technologies are shaping society, Zevenbergen said she and her team talk with young people about their lifestyles. 

“Asking young people, ‘How are you living today? How are you doing things?'” she said. “So ask young people the questions, and then say, ‘What impact does that have’ or ‘Who are the people providing the service in order to live that way?'”

With all of that established, we asked Zevenbergen which companies she’s investing in now that she believes could be market …read more

Source:: Business Insider

      

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