Short Briefings on Long Term Thinking - Baillie Gifford

European growth: unique brands, hidden champions

4 snips
Mar 18, 2025
Stephen Paice, a partner at Baillie Gifford and head of European Equities, dives into the undervalued landscape of European stocks. He discusses the potential for significant gains as outdated views shift. Key sectors like biopharmaceuticals, digital platforms such as Spotify, and the booming semiconductor industry are highlighted as ripe for investment. Paice also explores the resilience of certain companies amid trade tariffs, emphasizing the impactful role of culture and leadership in driving growth. His insights reveal a promising future for European innovation and investment.
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ANECDOTE

Bernard Arnault's LVMH Success

  • Bernard Arnault bought a struggling textiles maker and turned it into Christian Dior and more.
  • LVMH now outvalues Walt Disney and Nike combined through restoring prestige.
INSIGHT

Europe vs. US Stock Valuations

  • US stocks trade at a 50% premium to European stocks due to US exceptionalism.
  • European companies offer growth at more reasonable valuations, representing an investment opportunity.
INSIGHT

Europe's Low Base Advantage

  • Europe's recent struggles include slow GDP growth and crises like Ukraine war and energy shocks.
  • Political stability and lower base expectations mean Europe might surprise positively going forward.
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