Danielle Ecuyer
speaker
864 appearances
2 recordings
1 series
first heard Oct 2021
last heard Nov 2022
Danielle Ecuyer’s voice in public audio — every appearance, attributed to the second.
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Appearances
and what their interest cover is, and then how much is left over to invest for the future.
So if you were to pick potentially a sweet spot, not in a zero interest rate environment, but in a current interest rate environment, you want those companies to
that have sufficient cash flow, that are not overly indebted, that can still invest for the future.
And one of the problems with the technology sector or the biotechs is that, you know, or the software companies, the whole argument, which I had to learn about with my second book, is that you just grow at any cost.
And you can do that when the cost of capital, so you can borrow money at really low rates.
But you can't do it when interest rates are 5%.
So that's the only caveat I would say that, you know, it's part of the, you've seen the compression in the valuations on the likes of Amazon and Xero.
Part of that was because the companies, yes, they've got huge cash flows, but they're still pouring a lot of money in.
And then, of course, there's cyclical factors.
So sorry, there's the shades of grey again.
Okay.
Now, isn't that an interesting question?
What is a growing industry at the moment?
Do you want to have a stab at that one, Owen, before I have a go at it?
No, I agree.
You've made some really good points there.
It's just important to differentiate between if you want to do your buckets, the bucket approach, cyclical companies.
So think building materials companies, anything that is cyclical.
probably related to economic growth, so the banking sector potentially, finance stocks.
Then you've got your secular growers, which I mentioned, really important.
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