The Trade Desk: Premium Valuation Meets Deteriorating Performance

Group 1 - The Trade Desk's share price has decreased over 70% from its all-time highs, including a more than 16% drop following weak Q4 earnings guidance [1] - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations due to poor long-term business prospects, aiming for excess risk-adjusted returns through secular growth opportunities in markets with entry barriers [1] - Narweena's investment strategy emphasizes company and industry fundamentals to uncover unique insights, with a high risk appetite and a long-term horizon targeting deeply undervalued stocks, particularly in smaller cap markets [1] Group 2 - The aging population, low population growth, and stagnating productivity growth are expected to create new investment opportunities, contrasting with past trends [1] - Many industries may experience stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] - The economy is increasingly influenced by asset-light businesses, leading to a declining need for infrastructure investments, resulting in a large pool of capital pursuing limited investment opportunities, thus driving up asset prices and compressing risk premia over time [1]