The following article appeared on Livewire on December 9, 2019.
If you’re contemplating investing in the Australian technology space, be warned that not all businesses in the sector are made equal.
“I think there are some really exciting companies in the IT space within Australia. A lot of them aren’t exciting and I think you have to be really discerning,” says Joe Magyer, Chief Investment Officer at Lakehouse Capital.
The reason why ASX tech stocks such as Afterpay and Altium have succeeded is because they are solving a global – not local – problems and are able to scale into new geographies in a disciplined way. The reality, according to Joe, is that most Australian IT companies aren’t globally relevant.
In this interview, Joe shares his approach to domestic technology stocks and uses Altium as an example to highlight some of the specifics he seeks in companies.
Disclosure: The Lakehouse Small Companies Fund owns shares of Altium and Afterpay.