David Ricci of William Blair - The Future of Growth Investing

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Aug 13, 2024

Join David Ricci, a veteran Portfolio Manager at William Blair, as he dives into the intricacies of growth investing. With a storied career and a commitment to philanthropy, David discusses his investment philosophy and insights on market disconnection from the economy. He analyzes the implications of interest rate changes on growth companies and shares his outlook on the tech titans of the Magnificent 7. Get a glimpse of his philosophy that intertwines investment with physical and mental wellness, all while navigating today's financial landscape.

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INSIGHT

Growth Investing Philosophy

David Ricci's growth investing approach focuses on a trusted, collaborative team with a long-term holding period.
He invests only in structurally advantaged companies and keeps a diversified, sector-neutral portfolio with about 30 high conviction holdings.

INSIGHT

Active Management Can Outperform

Active managers using fundamental analysis can outperform in growth investing with the right long-term focus.
Success comes from picking durable, growing companies, diversifying, and avoiding short-term market chasing.

INSIGHT

Market Focus Beyond Economy

Markets focus on structural themes like artificial intelligence longer term rather than current economic conditions.
The market's focus on AI is rational and likely to be significant when viewed in 5-15 years.

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Today, Rusty and Robyn are joined by David Ricci, a Portfolio Manager at William Blair. David Ricci, CFA, partner, is a portfolio manager on William Blair’s Large Cap Growth strategy, which he joined in 2011. From 2005 to 2018, he was also a portfolio manager on the Mid Cap Growth strategy. Previously, he was the group head for the consumer sector, focusing on specialty retail and e-commerce companies, in William Blair’s sell-side research group. Before joining William Blair in 1994, David gained extensive experience at Procter & Gamble, Melville, and Bain & Company. He is a member of the CFA Institute and the CFA Society Chicago. David received a Sc.B., magna cum laude, from Brown University and an M.B.A. from Harvard Business School.

Key Takeaways

[03:31] - David’s professional background, his current role and his volunteer work.
[06:55] - When it comes to managing a growth portfolio, what is David’s philosophy?
[11:51] - Does David think that active managers who are using fundamental analysis can still outperform in current market conditions?
[14:40] - Does he think that the markets right now are more disconnected from the economy than they have been historically?
[16:16] - What is David’s market outlook and how does this outlook affect his portfolio positioning, if at all?
[19:14] - If we do get higher interest rates, how would this impact longer duration growth companies?
[21:16] - What is David’s current outlook on the high profile names of The Magnificent 7?
[24:32] - What are the implications of today’s massive IT outage for long-term investing?
[25:58] - Who does David think should be on “The Mount Rushmore of Growth Investors?”
[27:40] - What is David’s favorite investment idea for the remainder of 2024?
[30:35] - Who are some of the colleagues and mentors that David is thankful for?

Quotes

[12:27] - “Everyone…is talking about The Mag 7, but if you go back 5, 10, 15 years - it has really been a market dominated by large tech, whether it is Apple, Microsoft, Google, Meta [or] Amazon. I mean, these companies have been in the spotlight today, five years ago, ten years ago, fifteen years ago, some of them go back much further than that. So, it has been a fairly narrow world [for a while now.]” ~ David Ricci

[16:47] - “[Aside from the election] I think the major tug of war going on right now…is the expectation of lower rates and what that could mean for the economy.” ~ David Ricci

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Disclosure(s) - Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor.

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org.

Compliance Code: 1909-OPS-7/31/2024