Anne-Marie Peterson is an equity portfolio manager at Capital Group with deep background in covering consumer businesses. Earlier in her career, she was a retail analyst during a period of major disruption in the industry. We asked Anne-Marie how those experiences shaped her investment approach, why culture and leadership matter so much in her process and how she’s thinking about opportunities in the age of artificial intelligence (AI).

Can you tell me about your investment approach? Did your time as a retail analyst influence your process?

Absolutely. I covered retail during 2006, right as Amazon was really coming on the scene as a disruptive force. A couple of lessons stick with me from that time, one being that everything is cyclical, just some things are very long cycle. Retail is a very long-cycle business with winners and losers, and that can compound over 10 to 15 years.

In its early days, many large and specialty retailers dismissed Amazon. But it offered a better experience for the consumer and had an interesting economic model that allowed it to carry an enormous inventory. It turned out to be a very disruptive force that was widely underestimated.

That experience reinforced something I still believe today: culture, focus and discipline can drive superior outcomes over long periods. As an analyst I spent a lot of time trying to understand company culture, and that’s become even more important in a world shaped by rapid technological change. It’s not easily quantifiable, but I look for companies that emphasize adaptability, innovation and an intense focus on the customer. Those qualities often separate long-term winners.

In this AI world where there’s going to be new opportunity and new risk, I think, more than ever, you’re underwriting management and culture.

When you’re meeting with companies, how do you identify this culture and strong management?

Through their actions rather than what they say. I’m looking for a clear “true north” — something the company does exceptionally well — and evidence that the organization is disciplined about protecting that.

Take Hermès. The company is relentlessly focused on restraint. It’s entire model revolves around craftsmanship, scarcity and preserving the brand’s specialness. They limit their supply on purpose to support pricing power. They have their own craftsman facilities in Europe, many of which are in France where products are made. They’re even super disciplined about how many people they’ll let in the store at one time because they don’t want the shopping experience to feel overwhelming. Everything about the business reinforces that core philosophy.

Shopify is another example. Its founder is intensely focused on serving merchants, their customers. He has a principle that he’s not going to extract more from the system than he creates. That shows up in low take rates across its software, services and payment products. In other words, the fees that Shopify charges vendors are relatively low. He also thinks in 100-year increments, which shapes how the business is run.

So it’s not about what companies say. It’s how their practices consistently reinforce what they believe makes them special.

When did culture become such a central part of your investment process?

Pretty early on as an analyst. A portfolio manager here, Alan Wilson, once said the best retailers are cults, and there’s some truth to that.

Great companies usually center on the customer and constantly improving the experience they deliver. Costco, for example, in addition to their well-known operating discipline, flies their regional managers from all over the world into Seattle once a month for three days because they believe that working together in person strengthens the culture and keeps everyone aligned. That’s a big deal.

I’ve also seen the opposite. I once covered a retail giant that expanded into new categories to drive growth, but those categories carried lower margins. Instead of adjusting expectations, the company tried to maintain the same margins by cutting corners. Over time, the value proposition eroded. I saw it pretty early, and I see that kind of thing frequently. Experiences like that reinforce how critical culture and discipline are.

How are you thinking about AI and potential beneficiaries today?

There are the obvious beneficiaries and then the first- and second-order effects. Semiconductor manufacturers and their suppliers are the enablers of AI. Then there are the companies helping enable the infrastructure buildout. Our analysts are spending a lot of time identifying the bottlenecks. One example is skilled labor. Demand for electricians is surging as new infrastructure is built. We’ve found a company that outsources highly skilled electrician labor, which is increasingly valuable.

At the same time, AI is calling into question the durability of a lot of software models. For me, the key is continuing to underwrite companies that have management teams that I think have the kind of vision and fortitude to take some short-term pain to position something for the long-term. Because I’m really focused on duration as a long-term investor.

How does that perspective help you stay invested through volatility?

As a portfolio manager, you need ways to narrow the world and maintain conviction when things inevitably get difficult, because long-term investing is never a straight line. For me, conviction often comes from underwriting something bigger than near-term numbers — like the culture, the system and the long-term asset you’re investing in, because those factors can help sustain a company through periods of uncertainty and change.