Q1 Fireside Chat with Focus Growth’s Dan Davidowitz

Quarter-end update discussing factors that impacted the Focus Growth Portfolio & what Dan Davidowitz sees as long-term opportunities ahead

As market participants became more focused on recession risk in the first quarter of this year, we saw a flight to quality that was more consistent with past market drawdowns. In this quarter-end fireside chat, Polen Focus Growth’s Dan Davidowitz shares his thoughts on factors impacting the Portfolio, market trends to watch, and what he sees as long-term investment opportunities ahead.

Read the full Q1 Focus Growth Commentary →

Webinar Q&A Highlights

  • Opening remarks & introduction (1:53)
  • Overview of Polen’s equity investment philosophy & long-term holding strategy (2:56)
  • How is the Focus Growth Portfolio positioned for rising rates & a slowdown in earnings? (4:48)
  • Thoughts on recessionary news impacting Amazon’s e-commerce sales & advertising business (8:39)

Find out if the Future of E-Commerce is Still Bright→

  • Have workforce layoffs & cost-cutting in the technology sector affected stock prices negatively? (13:09)
  • Decision to trim Alphabet & Adobe holdings from the Focus Growth Portfolio considering ChatGPT (16:01)
  • Given Polen’s high conviction in healthcare, reasons why Thermo Fisher was considered last year (18:52)
  • Does Visa & Mastercard being reclassified to financials present any risk related to the recent bank failures? (21:26)
  • Explanation for the Meta sell discipline & if it would be considered for Polen Focus Growth in the future (23:25)
  • Why companies like Apple & Tesla don’t meet all Polen’s equity investment guardrails (27:41)
  • Despite disappointing earnings this quarter, what does research indicate about Netflix’s ad model? (31:00)
  • Has the rapid adoption of digital changed our long-term view of DocuSign’s growth potential? (33:21)
  • Updated thoughts on PayPal in light of share price decline & leadership changes (36:22)
  • Rationale for company weights in the Portfolio given the small number of total holdings (39:28)
  • Ideal market conditions for the Focus Growth Portfolio & what a recession might mean (42:02)

Learn how Quality Performs Across the Business Cycles →

  • Thoughts on Airbnb & the cyclical nature of business in the travel industry (45:34)
  • Which holdings detracted from performance this quarter & has Polen’s conviction changed? (48:49)
  • Expectations for corporate earnings season for Polen Focus Growth Portfolio companies (50:55)
  • Is finding companies with growing fundamentals difficult in today’s inflationary environment? (52:44)
  • Key takeaways & closing comments (55:08)

Read the full Q1 Focus Growth Commentary →

We think these are great businesses with secular growth behind them–they usually dominate industries. Besides being vigilant, we just need to be patient when growth slows temporarily.

—Dan Davidowitz, CFA & Focus Growth Portfolio Manager

Important Disclosures
This is being provided for informational purposes only. Opinions and views expressed constitute the judgment of Polen Capital as of April 20, 2023 may involve a number of assumptions and estimates which are not guaranteed, and are subject to change without notice. Although the information and any opinions or views given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness, or accuracy. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions. The views and strategies described may not be suitable for all clients. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. This document does not identify all the risks (direct or indirect) or other considerations which might be material when entering any financial transaction.

Past performance is not indicative of future results and profitable results cannot be guaranteed. This information should not be construed as a recommendation to purchase, hold, or sell any particular security. Specific securities described may or may not be held in portfolios managed by Polen Capital. There is no assurance that any securities discussed herein will be in the portfolio at the time you review this video or that any securities sold have not been repurchased. The securities discussed do not necessarily represent the entire portfolio. It should not be assumed that any of the securities, transactions or holdings discussed were or will prove to be profitable or that any investment recommendations we make in the future will equal the investment performance of the securities discussed herein. For a complete list of Polen Capital’s past specific recommendations for the last year, please contact [email protected].

- Commentary

We believe owning cash-rich, competitively advantaged businesses avoids the perils of leverage and lack of differentiation

- Polen POV

A reminder for the unemotional, patient investor that “fair prices” for high-quality businesses can occasionally become “wonderful prices”