Baillie Gifford US Growth trust manager Kirsty Gibson
The point at which a professional investor is shown a new idea and is unwilling to process is the moment to retire from professional investing said Baillie Gifford US Growth trust manager Kirsty Gibson, and that is precisely what she is eager to avoid.
Citing Netscape co-founder turned venture capitalist Marc Andreesen, who in turn expanded upon Visa founder Dee Hock's concept of the human brain being "littered with old furniture", Gibson explained that an investor must remain open to fresh, perhaps even inconceivable, concepts.
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"You have been an investor [through the 2000 tech bubble], you have seen the rise of the iPhone, you have accepted that we have moved from desktops to laptops, and you have seen and embraced the rise of social media," Gibson explained. "But then, in the last year or so, somebody puts TikTok in front of you and you just go ‘I don't get it'.
"That is the point where you are not ready to process a new idea, and that is the point that as a professional investor, you need to retire from professional investing."
Snap, parent company of app Snapchat, is one example of an investment held by the trust that may leave those of us older than 24 "scratching our heads as to what it is used for", but Gibson believes the firm, led by Evan Spiegel, is "reimagining the role of the camera".
"Snap is at the very forefront of augmented reality technology and they have the opportunity to power what is known as the ‘mirror world'," Gibson said. "This is where the physical and the digital worlds combine.
"You would hold up your camera to a location and perhaps you would learn something about the history of that location, perhaps you would be able to interact with it or invite friend to participate in a game at that location, or maybe even make purchases."
One example which utilises the closed-ended nature of the trust is Discord, a private holding that the manager described as "a hidden world".
While the communication platform was originally created with gamers in mind, it has become home to a wide range of communities, which reflects the "fluid and changeable" potential of the company.
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"It is fair to say the path to how this business evolves is not precisely clear," Gibson explained. "But we believe that they have the potential to become the social infrastructure of the metaverse."
This is not to say the trust invests in every new idea that comes across its path, nor do the managers pretend it will get it right every time.
Gibson said: "What we are trying to do is take our mental sweeping brush and ensure that we ask ourselves what the world might look like if this company is successful."
