Speaking in Sydney on Thursday, Epoch Investment Partners’ New York-based managing director and portfolio manager John Tobin pointed to the evolving nature of technology and its role in day-to-day life.
“Tech is the new macro … Technological change is accelerating, technological change is disruptive – and it’s pervasive,” Mr Tobin said.
Referencing a part of a book by American journalist and author Thomas Friedman, Mr Tobin highlighted changes in technology, social media and online platforms that had occurred since 2007 that “we take for granted today”.
“In 2007, Apple creates the iPhone. Hard to imagine there was a day where we didn’t have one, or a smart phone like the iPhone, but it was only 2007 when that took place,” Mr Tobin said.
“Airbnb was invented. And how quickly has that grown to be something that everyone globally takes advantage of? It’s astonishing.
“Where would we be without Twitter? Where would my president be without Twitter?”
Change is happening at a rapid pace and in a disruptive nature, he indicated.
“As investors, the challenge for us is to be aware of the possibility of technological change and fundamental permanent shifts in business models,” Mr Tobin said.
“That’s the challenge for us: to recognise who is threatened by Amazon. And probably more people than we’re really aware of.”
He later added that Epoch Investments tended towards investing in companies that had already begun to generate returns.
“The kind of tech stocks that work for us are the ones that a little bit further along in the life cycle, where they reach the point where they are cash flow generating machines and still growing,” Mr Tobin said.
“We find the stocks, we find the businesses that have the characteristics that we’re looking for in the developed markets of the world.”
