Portfolio Insights: Alger Weatherbie Specialized Growth Strategy

TRANSCRIPT

Speaker Question (continued): Then when things open up and people feel they're able to invest and spend again, these trillions of dollars or at least hundreds of billions will immediately be circulated throughout the economy and it can be like jet fuel on a fire where we see–and we just did see 40 percent year- over-year growth in I think it was M2 in the money supply if I remember right, which has never happened in history.

in quite a strong way and stronger than most had expected.

Speaker Question: The whole first half of 2020 was surprising to all of us. It was full of twists and turns and I was curious what's the one long lasting trend that you think evolved during this. Also, what is an industry or sector that got a boost as well as something that is irreparably hurt and never coming back? Josh Bennett: The first thing that comes to mind in terms of a more permanent change is the United States has proven that work from home, remote work can be incredibly effective. Our team had to very quickly adapt to working from home and we've done it swimmingly, I would say. We have the technology in our home offices that enable us to truly work from home as effectively as ever before. That's been a positive surprise. I think many of our companies had talked about the potential to someday move to a model where a portion of their employees would work from home, but there's always this concern that if somebody's at home, maybe they are building that backyard patio I mentioned instead of sitting at their desk and making the phone calls that they need to make or doing whatever their job requires of them. I think we've entered a period when, due largely to technology and some of the shifts that I talked about, work from home is more possible than it has ever been before and our country has proven that that can be effective, not in all industries, but if you're a knowledge worker and you're in a knowledge worker industry, you're likely to see a permanent change take effect. Now, the benefit of that is that companies can now hire much more broadly than they used to. They don't have to hire somebody who's willing to commute into Boston or into New York or into Chicago every day. They can hire the best talent wherever they are and be confident that that person can do work effectively from anywhere So that's a truly permanent change and I think it's a welcomed change. I think more than ever we have proven that we can do this and I think you're going to get better workers..

Is this one of the things that's driving the market? Is there still a lot of potential ahead both for the economy really taking off as well as potential inflation concerns?

Josh Bennett: We have talked quite a bit about that, that without a doubt we had an incredibly difficult market correction as people had no idea what would be in store and you did see massive action taken on a fiscal policy– from a fiscal policy standpoint, from a monetary policy standpoint. I agree with you that I think that a lot of this has yet to flow through. I do want to be clear that we are already seeing some of the early signs of this kind of money flowing through and one area we're seeing it is on the consumer side. They are spending without a doubt. As they're able to get back out and move around, they're spending on things like restaurants. So you're seeing some incredible comps at some of the restaurant chains that had been closed and are now opening up. You're seeing strong retail comps at concepts like Ollie's, which were open through the downturn and you're seeing people invest in their home and there are countless names that have benefited. I mentioned the SiteOne landscape supply, which is really pushing into new territory in terms of its ability to supply landscape suppliers with the materials that you and I need to build a backyard patio or to make sure that our grass is taken care of. I agree that it could be jet fuel on the fire. There could be more growth to come and we're certainly hopeful that we'll see that. I would say that we are beginning to see that already, that it's no longer speculation because in the second quarter, we saw the consumer coming back