Internet: Digital Media & Travel – Justin Patterson
Hi, I'm Justin Patterson. I'm the lead research analyst on the internet and digital media team at KeyBanc. I cover companies that millennials and Gen Z like.
Look at me, I'm a skinny guy from California, so I'm absolutely a tech nerd. So, I just grew up basically hacking and disassembling products, figuring out how to surf the web, and break down my parents' passwords to spend more time online.
So, that really got me going from a young age. And these days, with the pandemic, I've had just no shortage of time to really binge all the content, whether it's some Cobra Kai off of Netflix, or even spending time with my new friend, Baby Yoda on Disney Plus here.
So, it's been a fortunate time. I get to do what I love. Covering internet on a day-to-day basis is always fascinating because saying internet is saying electricity. It informs our daily lives, and you can see it in front of us.
If you've been out walking the streets of San Francisco, you see people hailing an Uber, figuring out which Airbnb they're at, trying to find their Tinder date at the coffee shop. So, there's no shortage of just how you see people interacting with internet media on a day-to-day basis.
And that really informs a research process, where my team likes to do a lot of surveys that look at how consumer behavior is changing, to try to identify where more market cap might be created. And in turn, where some companies might be losing market share, and face technological obsolescence issues.
Scrolling Netflix and binging TikTok is a really interesting form of research in the sense that you get to see just where exactly consumer time spent is happening.
What I really like about working with the KBCM research team is the degree of collaboration. So, the beauty of a sector like internet is that I cross over to a ton of different other analyst teams. So, whether it's the software side or the consumer side, or even semiconductors, I always have some other research team to bounce ideas off of, and ultimately create a better research product.
The biggest surprise that I find investors constantly have around internet companies, is just really being cognizant of the end market. And what I mean by that is, lots of companies go through a hyper growth phase, and it looks like that can continue for a long period of time. But all of these go back to some end market that's grounded in the real world.
By focusing on the big picture of a company: Where is their end market? Where are their customers? You can filter out a lot of the noise that occurs on a day-to-day basis, and identify situations where risks might be overblowing.
The best advice I've ever received is that things are never as great as they seem, and things are never as bad as they seem.
And we're coming out of a period of digital acceleration, and then dealing with the reopening, unwind for some companies. I think the market is overshooting to the downside at present. So, as comparisons normalize, true business fundamentals should become apparent again. And I think there's some opportunities for investors to make money.
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“The beauty of a sector like internet is that I cross over to a ton of different analyst teams. So, whether it's the software side or the consumer side, or even semiconductors, I always have some other research team to bounce ideas off of, and ultimately create a better research product.” Justin Patterson, KeyBanc Capital Markets