Portfolio Insights: Alger Weatherbie Specialized Growth


Over time we judge the fundamentals of our company. For example, let's say quantitatively our bottom-line earnings growth for the whole portfolio is 20 percent plus. And this has been very consistent over many years as computed by Matt Weatherbie, who has done this for multi-decades and in the current form. So as long as the earnings continue to grow at 20 percent plus and if the multiples stayed the same, then the stock, the appreciation should be at this similar rate. We try not to look at this as kind of a cycle when smaller cap outperformed large cap vice versa. It is our job to find what we believe are the best, most dynamic and fastest growing companies to benefit our client's interest. Tyler Foster: Thank you. George, I have one last question that I think is a very important one and maybe even a good question to end on. We've seen the strong run for growth in general and your strategy. What gives you confidence that you and the team will continue to deliver strong results in the future? George Dai: I'll say that we are blessed to be in a compounding business. So often times people say that you guys have done well and wonder if they are buying at the peak. Following our time-tested Weatherbie Way, which continues to adapt and improve, and our team is mature and highly experienced and it will continue to add fresh blood to our team and it is our goal to create a lot more value in the next few decades. We let the compound mechanism benefit our existing and future clients. This is kind of the over arching view. And let me discuss a little bit more the median and the short-term view why we believe this is a good time to invest. We all know the U.S. economy dipped into a deep recession as early as February of this year and I think that the U.S. economy is climbing out of this short but very deep recession as we speak. With so many innovations ranging from cloud computing, ecommerce, gene therapy, autonomous driving, etc., which are making this world a better place and along the way creating so many opportunities for prepared investors to benefit. In the near term, great advancements in vaccines and the treatments are giving people hope that we will conquer the virus in the next year or so. In fact, as we speak, there are four pivotal trials in vaccines that have

already started or are going to happen in the next three months.

And a pivotal study in the treatment has already been initiated. And some of the early data have shown great results, including this morning's Moderna's data, which was published in New England Journal of Medicine. So in the best case scenario, Pfizer's CEO and the CSO, the chief scientific officer, talked publicly about a potential U.S. approval of its messenger RNA-based vaccine in October this year. And we think about it, with an effective vaccine we pretty much will be able to get over this virus and we'll resume more or less the normal lives that we had before. And the massive monetary and fiscal stimulus and measure it in the double digit trillions of dollars on a global basis of providing the upward pressure in the financial market. These are the points that have the possibility to propel the markets forward and up in the near and the medium term. We are very bullish over the longer term and over the shorter term we are actually cautiously optimistic that we are going to get over the virus and human society is going to prevail. Tyler Foster: It's certainly been a pleasure hearing from you and we thank you for taking time out of your busy day. If you have additional questions or would like to review the strategy in more detail, please reach out to your local Alger representative. We will be making available a transcript of today's call and we'll be sure to share it with you and your colleagues.

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