Stuart Dunbar on Where Patient Growth Investors Find Value

Global equity markets currently exhibit high levels of speculation and a fixation on short-term visibility, often overlooking the steady progress of individual companies amidst geopolitical uncertainty and inflationary pressures. Stuart Dunbar, a partner at Baillie Gifford, argues that this short-termism creates significant opportunities for long-term growth investors to acquire undervalued assets. Key areas of interest include the biotech and healthcare sectors—specifically "picks and shovels" providers like Medpace—and emerging markets, where political stability is improving relative to volatile developed economies. Large emerging market companies currently trade at a fraction of the valuation of their U.S. "Magnificent Seven" counterparts, representing an unjustified discount. Successful growth investing requires the willingness to endure short-term volatility for asymmetric returns, as evidenced by early investments in SpaceX, where the changing economics of space travel outweighed initial technical failures and high valuations.