Michael Moe The Growth Investor

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Michael Moe has over 20
years of experience and previously co-founded and was CEO of ThinkEquity
Partners, a growth focused investment bank. From its inception in July 2001,
the firm grew at 50% CAGR. ThinkEquity was sold in March 2007 to London based
Panmure Gordon. Prior to that, Mr. Moe was Head of Global Growth Research at
Merrill Lynch and before that he was Head of Growth Research and Strategy at
Montgomery Securities. Moe was awarded his BA in Political Science and
Economics at the University of Minnesota.

Mr. Moe has been named to Institutional
Investor’s “All American” research team and has been awarded “Best on the
Street” by The Wall Street Journal. Additionally, he has been called “one of
the best stock pickers in the country” by BusinessWeek magazine. He has also
testified in front of the U.S. Congress on the subjects of education
technology, the new economy and initial public offerings, and he has also
appeared before the President’s Information Technology Advisory
Committee.  He is frequently cited in publications such as The Wall Street
Journal and The New York Times for his opinions on growth companies and also
appears regularly on financial programs on CNBC and Fox Business News. 
Mr. Moe is a contributor to the AlwaysOn Network - a blog site about new media
technology and venture capital news. He earned his BA in Political Science and
Economics at the University of Minnesota.  He is a member of the New York
Society of Security Analysts, the San Francisco Analyst Society and is a past
advisor for the Center for Innovation. He is also an advisor to Institutional
Venture Partners (IVP). Mr. Moe was on the National Finance Committee for John
McCain’s Presidential Campaign, and was a policy advisor. Mr. Moe is on the
board of directors for the National Football Foundation/College Football Hall
of Fame.  In 2007, he published his first book, Finding the Next
Starbucks: How to Identify and Invest in the Hot Stocks of Tomorrow, which has
gone through three printings and has been published in five different
languages.

Who wouldn't want to find the next big thing in investing? Michael
Moe thinks he can help you do exactly that. Moe is a former director of
global growth stock research at Merrill Lynch and the cofounder and chairman of
ThinkEquity Partners, an investment advisory and research firm based in San
Francisco. He is also an expert on the "new economy" and entrepreneurship.
Moe, the author of Finding the Next Starbucks: How to Identify and Invest
in the Hot Stocks of Tomorrow, spoke with U.S. News Assistant
Managing Editor Tim Smart. 

Is there a systematic approach to finding hot companies
to invest in?

One of the things I found as a research analyst was that the best companies
tend to be systematic and strategic and consistent over time. 

But can individual investors really beat the market? The statistics
suggest they can't. 

The statistics are what they are. Clearly, as a general observation, most
people would be better off investing in low-cost index funds. To outperform the
market is very difficult. Most people shouldn't try. They don't have the skill
set, the time, the passion, whatever it is. Investing in growth companies isn't
speculating. You really have to do your homework.

You focus a lot on broad societal trends like demographics. Why? 

I think demographics is an extremely important trend to understand.
Demographics is like this big, slow curveball coming over the plate. The aging
population is a phenomenal demographic from an investment point of view. 

So you should just buy healthcare companies that cater to this aging
demographic? 

Medtronic, Stryker, Johnson & Johnson have been phenomenal growth
companies over a long period of time. But where the 10-baggers are going to be
found are in the small-cap or emerging-type companies that are focused on
products such as knee replacements or whatever. I can't even tell you what that
is.

Your book talks about searching for the four p's: people, product,
potential, and predictability. Which is the most important? 

The people is the most important thing to get right. The predictability
piece is probably the hardest on which to make the right call. 

So you find all four? Is that it? Just buy and enjoy the ride? 

When you find a company that has these four p's, the worst thing you can do
is sell prematurely. It's just too hard to find the next one. 

Looking forward, what is the biggest trend that investors should try to
take advantage of? 

There are probably 100 trends. China clearly is one; you just can't argue
against the numbers. But probably the overarching trend is this whole knowledge
economy-brainpower, innovation, and knowledge. Look for companies that have the
ability to attract and retain the smartest people.

Edited by atulbull - 10/Jan/2010 at 12:39pm