INVESTOR’S GUIDE • ROUNDTABLE

KETTERER: The stocks in the absolute epi-

center of pain of the big wipeout, so many of

them are in travel, hospitality, aerospace, and

aviation. But wow, what you can find there.

Who would have imagined that you could buy

Airbus at 12 times earnings—a company in a

duopoly. Or in travel, Sabre or Amadeus, its

Spanish-listed competitor. They’re all about

travel volume, and when it picks up, that’s

when they generate fees.

FORTUNE: DoorDash and Airbnb and other

later-stage startups are expected to IPO

soon. They have so much more momentum

now than we would have imagined eight

months ago.

YEN: At the beginning of the pandemic,

everyone thought, Oh, gosh, Airbnb was on its

way to going public, and then the travel and

hospitality industry was seemingly decimated.

Silver Lake was quite prescient, stepping in

there at a very reasonable valuation. And now

Airbnb is booming.

On the private venture capital side, valua-

tions are kind of crazy. So while a lot of compa-

nies are in preparation to file, more and more

are looking at alternative ways of getting fi-

nancing. There’s been a lot of discussion about

direct listings and SPACs [special purpose

acquisition companies, which raise cash to buy

privately held startups and take them public].

That’s not the right alternative for every com-

pany, but I love the trend of investor democra-

tization. The openness to doing things not just

the traditional way, I think, is ultimately going

to benefit the broader economy.

BROWN: But it’s not always better. Let’s look

LinkedIn experience, as well as Dropbox and

Stripe—all that experience from enterprise

tech. And so that’s going to enable them to

accelerate some of the changes faster than you

would see otherwise.

SARAH KETTERER: Before banks get too ma-

ligned: From a value perspective, they became

so cheap. Valuations of European banks fell

through October lower than they were in the

global financial crisis, even though they have

much more capital now. And if a really good

bank has big franchises in faster-growing

countries in Central and Eastern Europe, like

UniCredit in Italy does, it’s worth looking

at. UniCredit trades at 40% of tangible book

value, less goodwill, and it should trade at

80%. That, in my simple math, is a double,

and I’ll take that any day.

FORTUNE: We’ve been talking about the

pandemic as a win for tech. But not all tech-

nology is COVID-proof. If you’re running,

say, an online travel business, your stock is

struggling.

EISWERT: We’re shareholders in Trainline.

They basically run the app for electronic tick-

eting for the U.K. and continental Europe.

They’ve had a disaster of a year. But they’re

only gaining share. And as train ticketing

comes back, there’s not going to be any paper

tickets. It’s a long-term growth story—they

just happen to be on the wrong side of

COVID.

SUBRAMANIAN: The interest rate backdrop

is so low right now that it seems like you need

to be in really long-duration growth stocks,

especially in tech. Those stocks have looked

amazingly attractive because the cost of

capital has fallen to very low levels. But if you

use an interest-rate-sensitive valuation model,

growth stocks now look more expensive than

value companies.

EISWERT: There’s also a big difference within

tech. Apple and Microsoft trade at very high

valuations. Amazon, I think, is experienc-

ing extremely positive fundamentals which

are not sustainable. And on the other hand,

I actually think Google has been hurt by

COVID. So Google’s valuation looks attractive.

Facebook actually looks attractive.

PICKS

FROM

THE

EXPERTS

Trainline

(LON: TRN, $6)

Alphabet

(GOOGL, $1,774)

Facebook

(FB, $279)

Airbus

(PA: AIR, $ 10 7)

Sabre

(SABR, $ 10 )

Amadeus

(MC : AMS, $69)

DraftKings

(DKNG, $43)

PRICES AS OF 11/16/20

315 %

PRICE PREMIUM OF GROWTH

STOCKS OVER VALUE STOCKS

in the MSCI World Index at the end of

the third quarter—a gap that suggests

value stocks are due to rebound.