Pinboard (jerryking)
https://pinboard.in/u:jerryking/public/
recent bookmarks from jerrykingJust how rich are businesses getting in the AI gold rush?2024-03-26T13:06:29+00:00
https://www.economist.com/business/2024/03/17/just-how-rich-are-businesses-getting-in-the-ai-gold-rush
jerrykingapplications artificial_intelligence big_tech chatbots Chatgpt cloud_computing CPUs generative_systems GPUs inferences intellectual_property investing investors layer_mastery Microsoft model-making Nvidia OpenAI physical_infrastructure semiconductors SMAC_stack start_ups technology_stacks value_creation vertical_integrationhttps://pinboard.in/https://pinboard.in/u:jerryking/b:90084a00e499/All-star cast of Canadian entrepreneurs teams up on new approach to building and funding companies - The Logic2024-03-12T14:23:06+00:00
https://thelogic.co/news/all-star-cast-of-canadian-entrepreneurs-teams-up-on-new-approach-to-building-and-funding-companies/
jerrykingCanada Canadian corporate_investors founders funding investors Joe_Canavan Michael_Katchen Simple_Ventures start_ups vc venture_capital Wealthsimplehttps://pinboard.in/https://pinboard.in/u:jerryking/b:8db0c6232cce/Investor Joe Canavan quietly backed startup financial tech companies through downturn - The Globe and Mail2024-01-09T15:41:04+00:00
https://www.theglobeandmail.com/business/article-investor-joe-canavan-quietly-backed-startup-financial-tech-companies/
jerrykingangels Bay_Street investors fin-tech start_upshttps://pinboard.in/https://pinboard.in/u:jerryking/b:f0c2dadd3a52/Investing in the Unknown and Unknowable2023-12-16T14:33:12+00:00
https://scholar.harvard.edu/files/rzeckhauser/files/investing_in_unknown_and_unknowable.pdf
jerryking>investing<< in the >>unknown<< and the >>unknowable<< (UU). But they have done so on a reasoned, sensible basis. This essay explains some of the central principles that such >>investors<< employ. It starts by discussing “ignorance,” a widespread situation in the real world of investing, where even the possible states of the world are not known. Traditional finance theory does not apply in UU situations.
Strategic thinking, deducing what other investors might know or not, and assessing whether they might be deterred from >>investing<<, for example due to fiduciary requirements, frequently point the way to profitability. Most big investment payouts come when money is combined with complementary skills, such as >>knowing how<< to develop real estate or new technologies. Those who lack these skills can look for ”sidecar” investments [i.e. = "bank shots"] that allow them to put their money alongside that of people they know to be both capable and honest. The reader is asked to consider a number of such investments.
Central concepts in decision analysis, game theory, and behavioral decision are deployed alongside real investment decisions to unearth successful investment strategies. These strategies are distilled into eight investment maxims. Learning to invest more wisely in a UU world may be the most promising way to significantly bolster your prosperity.
KEYWORDS: investing, unknown, unknowable, sidecar investment, fat-tailed distribution, Buffett, Kelly Criterion, asymmetric information]]>alpha asymmetrical bank_shots Gates_Foundation ignorance investing know-how unknowables unknowns Warren_Buffett domain_expertise investorshttps://pinboard.in/https://pinboard.in/u:jerryking/b:8aab00785a15/Tom Bradley: Five investing concepts that don't get enough coverage - The Globe and Mail2023-11-24T07:42:43+00:00
https://www.theglobeandmail.com/globe-investor/investment-ideas/the-key-to-being-a-successful-investor-is-long-term-strategy/article29385022/
jerryking>status quo<<. Paraphrasing Mr. Bourdieu, she said, "Subtle >>cultural signals<< reproduce the position of the elite …"......There are topics that keep repeating themselves – what Mr. Bourdieu calls the Universe of Discourse – that serve to entrench the industry's social and political hierarchies, but do little to enhance investor returns. Indeed, they likely hurt returns..........Our current Universe of Discourse is heavily reliant on economists and their predictions, with the ones who have been most accurate recently having the **loudest voices** [i.e. = "bombastic"]. There is no differentiation between skill and luck, nor is there accountability for previous forecasts.
The Discourse places importance and urgency on >>short-term<< events and returns, most of which are forgotten weeks or months later. There's also a predisposition to provide simple explanations for complex events – a cause for every effect. The result is a pulsing desire to adjust our investments to what's going on in world. To take action.
To be successful, however, investors need to think beyond the established Discourse and focus on what's important to them.[i.e. = their "personal economy"] The urgent news, short-term market moves and zigs and zags of the economy should be on the radar, but it's the >>undiscussed<< and undisputed that has a more profound impact on investment returns, and needs to be deeply understood.
In my view, the following concepts don't garner enough coverage [i.e. = "underreported"].
(1) Investing based on short-term strategies and forecasts is futile.
Outfoxing the market can work for a while, but doing it consistently is impossible. The world is complex and unpredictably interconnected, and too many variables are hidden in the shadows. And importantly, frequent trading doesn't cash in on the biggest advantage most investors have – a >>long-time horizon<<.
(2) Time and risk are at the core of investing.
Time is required to unleash the power of >>compounding<< – >>Albert Einstein<<'s eighth wonder of the world.......And time is inextricably linked to >>risk<<. For long-term investors who are well diversified, loss of capital is not an issue, nor is short-term volatility, although both feature prominently in today's discourse. An investor's true risk is the possibility of not achieving a reasonable long-term return.
(3) Valuation is way more important than central bankers, politics and capital flows.
(4) **Rarely discussed** is the fact that the interests of the wealth management industry are not the same as the clients.
>>Warren Buffett<< said it best: "Wall Street makes its money on activity. You make your money on >>inactivity<<." Corporate growth strategies and compensation schedules are all about activity – new products, sales campaigns and strategy shifts. In the meantime, investors' most effective option, most of the time, is '>>do nothing<<.'
(5) And finally, emotion is the most consistent crippler of portfolio returns.
Yes, security selection and fees are important, but they pale in comparison to the impact that investor behaviour has. That's because investing runs against >>human nature<<. We're wired to buy high and sell low. As a result, changing direction at market extremes and/or abandoning the plan when it's needed the most are all too common occurrences.
Investors need to develop a plan that takes an appropriate amount of risk, absorb the bumps along the way and take full advantage of a >>time horizon<< that is far beyond what the Universe of Discourse ever contemplates.
]]>bombastic compounded compound_interest cultural_signals cultural_signifiers emotional_mastery Gillian_Tett human_nature investing investment_management man_in_the_mirror Overton_Window power_structures short-term_thinking status_quo time_horizons Tom_Bradley valuations what_really_matters undiscussed doing_nothing inactivity Albert_Einstein investors personal_economy underreported Warren_Buffett long-term risks overlooked unnoticedhttps://pinboard.in/https://pinboard.in/u:jerryking/b:13c7da8f66ca/Cutting through the noise: For investors, it’s crucial to distinguish between the urgent and the important2023-11-05T13:50:59+00:00
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-cutting-through-the-noise-for-investors-its-crucial-to-distinguish/
jerryking >diversification<<, **time frame**, and >>valuation<< to provide perspective on current events.....replace overused industry jargon like tactical, structured, enhanced, smart beta, sector rotation and index weight with words like objectives, asset mix, compounding, routine, fear, greed, and plenty of “I don’t know.”[i.e. = "intellectual humility"]
three reasons for dusting off the trusty, old [i.e. = "perennial"/"timeless"] principles:
(1) too many investors are picking products and advisers without an understanding of how investing and markets work..........recurring themes in the answers (no plan; performance chasing; FOMO; thinking their adviser knows more than they do), which led me to my overall conclusion that the wealth management industry, with all its sophistication, innovation, and size, has a serious problem. It’s built on a weak foundation.
(2) even investors well versed in financial fundamentals are prone to what Morgan Housel of Collaborative Fund calls, “>>cyclical learning<<.” Unlike the medical profession that builds on past successes and failures [i.e. = "compounding knowledge"] to improve treatments and medications, it seems investors must relearn lessons each cycle. As Mr. Housel says, “Every five to seven years people forget that recessions occur every five to seven years.”.....Wealth management is unusual in this respect.........“Cyclical knowledge, and the inability to fully learn from others’ past experiences, means accepting a level of volatility and fragility not found in other fields.”
(3) As an individual investor, you have a unique and valuable advantage.[i.e. = "slight edge"] Your time frame is longer than any institutional investor....By having the same decision-maker and a longer time frame, you have a continuity that institutions can’t match......This edge comes with caveats of course. To utilize it, you need to have a plan [i.e. = "roadmaps"] , and the >>patience<< and >>fortitude<< to stick to it. That’s the hard part and where this column comes in. You may need help staying steady when other aren’t. Doing what’s right for you when everyone else is heading in another direction. **Sticking to the plan** when you trust it the least.
Setting up and maintaining a simple investing strategy is mechanically easy but psychologically hard.....by cutting through the inevitable noise..... you’ll be a little more disciplined and a lot more successful, which is >>compounding<< at its best.
]]>compounding_knowledge consequential cyclical_learning diversification Eisenhower_Matrix financial_pornography investment_advice investors long-term noise time_horizons Tom_Bradley valuations intellectual_humility fortitude patience perennial roadmaps sticktoitiveness timeless the_single_most_importanthttps://pinboard.in/https://pinboard.in/u:jerryking/b:7cd462e82fc0/What I Learned After Reading Michael Mauboussin’s Base Rate Book | by Scheplick | Money out of Air | Medium2023-10-26T04:38:39+00:00
https://medium.com/luchini-in-the-air/a-few-things-i-learned-reading-michael-mauboussins-base-rate-book-5a1aa445c5a1
jerrykingbase_rates books Daniel_Kahneman investors Michael_Mauboussinhttps://pinboard.in/https://pinboard.in/u:jerryking/b:9822db0173f6/Venture Investing Frameworks | Colossus®2023-08-01T23:00:20+00:00
https://www.joincolossus.com/episodes/44807654/paik-venture-frameworks?tab=transcript
jerrykingColossus early-stage investors vc venture_capitalhttps://pinboard.in/https://pinboard.in/u:jerryking/b:650c9d1675e9/Learning from Nick Sleep — Investment Masters Class2023-08-01T22:59:09+00:00
https://mastersinvest.com/newblog/2020/9/16/learning-from-nicholas-sleep
jerrykinginvestorshttps://pinboard.in/https://pinboard.in/u:jerryking/b:7f0ac1688445/European tech investors need to up their ambitions2023-07-10T16:19:22+00:00
https://www.ft.com/content/a493868f-75f2-4032-85ec-adb367a743f9?shareType=nongift
jerrykingEU Europe investors start_ups technologyhttps://pinboard.in/https://pinboard.in/u:jerryking/b:8187f5356afb/Weston family shifts private investing strategy after $6.9-billion Selfridges sale - The Globe and Mail2023-07-02T17:51:32+00:00
https://www.theglobeandmail.com/business/article-weston-family-investing-strategy-selfridges-sale/
jerryking>The Weston Family's holding company, Wittington Investments Ltd. Wittington is looking to redeploy the proceeds of its estimated $6.9-billion sale Selfridges & Co. in 2021, into more innovative opportunities.<<]]>Loblaws private_equity Susan_Krashinsky angels corporate_investors early-stage family_office George_Weston investors moguls Wittington_Investmentshttps://pinboard.in/https://pinboard.in/u:jerryking/b:4890c57389e7/Chaos Kings — the traders who make fortunes from disaster2023-06-28T15:17:20+00:00
https://www.ft.com/content/9d8ee26a-b5f6-4fdf-91e3-e67fda9cdf7e?shareType=nongift
jerryking> Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis by Scott Patterson<<
In financial markets, **doom-mongers** have star quality. Investors who make decent money when stocks or bonds are wafting higher are often dismissed as riding a wave with little skill or foresight. Those who supercharge returns by picking the best performing stocks or juicing up bets with borrowed money are frequently painted as lucky or even reckless. Neither characterization is necessarily fair, but such is life.......Bragging rights start kicking in when >>investors<< do well, or at least cling on, when **markets are under stress**. But rock-star status is reserved for a clique who have made storm-chasing in stocks and bonds in to something between an art and a science, and an extraordinarily lucrative one at that. They are the subject of >>Chaos Kings, a new book by Scott Patterson<< who casts an engaging and accessible light on what makes these oddball savants [i.e. = "misfits"] tick, and how they make fortunes from disaster [i.e. = "lemons-to-lemonade"]...........Much of the book is about author and former trader Nassim Nicholas Taleb, a Nostradamus-like character constantly warning complacent money managers of dark times ahead [i.e. = "negativity bias"/"pessimism"/"thinking_tragically"]...................Taleb clicked instantly with Mark Spitznagel, with whom he founded hedge fund Empirica in 1999. The idea of the fund was to lose money, most of the time, by buying cheap, unloved, unwanted derivatives contracts and wait, for years, for stocks to tank and the returns to roll in. Done right, this gives clients insurance against disaster, just by allocating a small slice of their funds to the strategy. But the long periods of losses are a drag..................at fund Universa, Spitznagel is still managing tens of billions of dollars and churning out 4,000% returns around periods of >>dysfunction<< such as when Covid lockdowns sent markets reeling in March 2020. The Chaos Kings believe traditional **asset managers** building portfolios out of stocks and generally safer bonds in the hope they will balance each other out are doing savers a disservice by failing to deal with **big, ugly shocks**.[i.e. = "exogenous shocks"]..........Taleb and Spitznagel are the thread, but the book also dives in to their copycats, rivals and outright naysayers. Their squabbles over which tail risk model is superior are headspinning. Some believe it is possible to predict disasters that mere mortals consider to be random. When is a black swan a grey swan or a dragon king? What about false positives? Is expensive tail-risk hedging actually worth the bother or does it amount to buying elaborate lottery tickets? One person’s “logarithmic objective function to maximize geometric returns” is another’s bullshit............Luckily, Chaos Kings avoids making readers feel like they’re out of their depth in a top-set maths class, and the power of the competing egos at play and the urgency of their message on everything from >>pandemics<< to the climate to the health of your life savings carry the tale.
]]>anti-fragility Black_Swan books book_reviews COVID-19 disasters discontinuities disequilibriums dislocations doomsayers dysfunction exogenous_shocks financial_markets financiers hedge_funds investing investors lockdown market_crashes misfits Nassim_Taleb negativity_bias pandemics pessimism short_selling thinking_tragically tough_slog traders lemons-to-lemonadehttps://pinboard.in/https://pinboard.in/u:jerryking/b:f982b43bf6c2/Sam Zell, 81, Tycoon Whose Big Newspaper Venture Went Bust, Dies - The New York Times2023-05-19T05:57:05+00:00
https://www.nytimes.com/2023/05/18/business/sam-zell-dead.html
jerrykinginvestors moguls real_estate obituaries Sam_Zellhttps://pinboard.in/https://pinboard.in/u:jerryking/b:a00c19cf708c/Future Returns: Wealthy Families Are Leaning Into Riskier Investments2023-05-17T20:28:01+00:00
https://www.barrons.com/articles/future-returns-wealthy-families-are-leaning-into-riskier-investments-d9c560c
jerryking>secondaries<<, which are funds that buy private-equity positions from institutional investors, typically at a discount. This is happening more frequently as public stock market volatility pushes pension funds, endowments, and insurers, for example, to shed their growing number of less-volatile private market holdings so their overall portfolio stays within a prescribed >>asset allocation<<,
Family offices are more than happy to step in and buy these off-loaded private-equity positions at a discount.
**Turning to Private Credit **
It’s not terribly surprising to find wealthy families turning to private equity.... a solid 30% are considering boosting their allocation to it—in other words, they are more willing to lend to businesses through funds or other vehicles.
Currently, the families surveyed only allocate about 3% of their holdings to private credit, so the starting point is low,....But the fact that fewer families are in the sector now could be attractive to families who sense an opportunity compared to other, more highly valued sectors of the market.
Concern over the health of regional banks also could create more opportunities for the private sector to provide businesses with credit and liquidity....... family offices also like the fact that private credit provides them with seniority in a company’s capital structure (offering protection should the company go bankrupt), in addition to stable cash flows at a time of economic uncertainty, and incremental additional yield.
Another plus: Private credit historically has outperformed public loans in the past 10 years. .......“There is a certainty and speed of execution and a flexible nature of the transaction that [doesn’t] necessarily exist in the public markets,”
**No “Sea Change” in Hedge Funds**
Wealthy families have allocated 6% of their portfolios to hedge funds, on average, since 2021, and not much is expected to change on that front, although 15% do expect to move more money into the sector.
“Yes, on the margin, more money will be flowing [into hedge funds],”..... “No, it’s not a sea change.”
The reason is hedge funds largely exist to outperform when times get tough. Macro and multi-strategy hedge funds did that during the past two or three years.
“It’s a very defensive allocation,” he says. Wealthy families aren’t “necessarily looking for the utility of ‘>>risk-off<<’”.....“They’re going to lean into risk and add risk **when the chips are down** [i.e. = "difficult moments"/"difficult situations"], [and] not look for safer harbors, per se.”
One reason for the “>>risk-on<<” posture is that 76% of the families surveyed have operating companies that are generating cash, a situation that is not being replicated at institutional investors that depend on alumni donations in the case of a university endowment or funding from a state or employer in the case of major pension funds.
The cash inflow from an operating business “enables you to constantly seek interesting risk,”
]]>alternative_investments asset_allocation buyouts family_office hedge_funds high_net_worth high-risk holding_periods illiquidity investors moguls private_equity risk-off risk-on risk-tolerance secondary_buyouts secondary_markets uniqueness risk-seeking risk-appetite difficult_situationshttps://pinboard.in/https://pinboard.in/u:jerryking/b:1b191f47345c/Variant Perception2022-12-26T06:27:40+00:00
https://notes.pinboard.in/u:jerryking/91cf2b48e9a5b20808f1
jerrykingdefinitions investors variant_perception consensus contrarians independent_viewpointshttps://notes.pinboard.in/https://pinboard.in/u:jerryking/b:187af907f634/Doesn’t anyone do due diligence any more?2022-12-06T04:33:40+00:00
https://notes.pinboard.in/u:jerryking/8448ccefe9778443ffb4
jerrykingangels bootstrapping due_diligence FOMO free-riding high-growth investors start_ups valuations VC venture_capitalhttps://notes.pinboard.in/https://pinboard.in/u:jerryking/b:3d6f24ab1eff/Doesn’t anyone do due diligence any more? | Financial Times2022-12-06T04:26:06+00:00
https://www.ft.com/content/e739d9ed-b8ee-4d8e-ad29-0d01889d5775
jerryking>related-party<< [i.e. = "self-dealing"] transactions. Oddities in the cash flow then give potential funders strong justification to raise governance concerns.
++++++++++++++++++
I fear that there is something of a >>cultural malaise<<. Yesterday >>Martin Wolf<< referred to the dangers of **silos**. If you add in the problem of >>short attention<< span which seems more prevalent possibly due to our use of computers and digitization, I think that there is a risk that poor conclusions will be reached when conducting investment research/ due diligence. My sense is that many people are quick at processing data [i.e. = "information processing"] but perhaps not so good at questioning data and what it truly represents [i.e. = "sense-making"].
++++++++++++++++++
Exactly. I’ve seen funds do deals despite the due diligence coming back negative because the deal team has more clout than the risk team.
]]>accountability due_diligence FOMO FTX herd_behaviour investors OTPP private_equity Sequoia SoftBank Temasek Theranos Tiger_Global venture_capital financial_controls related-party self-dealing attention_spans information_processing Martin_Wolf sense-making silo_mentality cultural_malaisehttps://pinboard.in/https://pinboard.in/u:jerryking/b:a9db28b992fe/Investor Alan Patricof Is Just Getting Started2022-10-14T10:38:02+00:00
https://www.wsj.com/articles/investor-alan-patricof-is-just-getting-started-11651854193?cx_testId=3&cx_testVariant=cx_2&cx_artPos=0&mod=WTRN#cxrecs_s
jerryking> "No Red Lights" by Alan Patricof"<<
Alan Patricof has no plans to move to Florida, and he does not want to play golf. “There’s too much retirement at 60 now,” says the pioneering venture capitalist, who launched his second fund, Greycroft, when he was 72 and his third, Primetime Partners, in 2020 when he was 85....... “There are possibilities in every time of life.”.......Mr. Patricof’s interest in meaningful longevity moved him to start Primetime, a $50 million venture fund for the over-60 market. “Listen, this is the fastest growing part of the population, so we’ve got to figure out how to keep these people active, motivated, interested and entertained,”.....“Stocks would go up and down, and I felt so remote,” he says. “Building a company from the earliest stages is just so much more satisfying and exciting than owning stock in GM, IBM or International Paper.”
In 1960 Mr. Patricof began making his own deals at Central National Corporation (CNC), the investing arm of the Gottesman family, which had made a fortune in the paper business. Although the company’s $1 billion portfolio favored traditional industries, Mr. Patricof seized the chance to invest in young, prepublic firms.......Hot off his private investment successes, Mr. Patricof decided to go into business for himself. He opened the doors of Alan Patricof Associates in 1970, when he was 35 and the venture capital business was still novel. Early bets on Apple, AOL and Cellular Communications Inc. grew the company, and new laws in the late 1970s that lowered the capital-gains tax rate and allowed pension funds to make venture investments boosted the amount of money in the venture market......Mr. Patricof decided to get back into the venture business with Greycroft in 2006, betting on digital firms like the Huffington Post and Venmo. Mr. Patricof is now chairman emeritus of the fund, which manages over $2 billion.
In a male-dominated industry, Mr. Patricof partnered with women in each of his funds: “I’ve just gone after the best people, and if they happen to be women, great,”........As he notes in “No Red Lights,” Mr. Patricof learned a few lessons the hard way. He says he failed to invest in a fledgling coffeehouse business in Seattle in the 1980s because he didn’t see the appeal of hanging out over coffee. “I imagine Howard Schultz laughing at me as Starbucks opens store number fifteen thousand,” he writes.
Yet Mr. Patricof believes his loyalty to business fundamentals has allowed him to capably surf several booms and busts. He says he is always looking to back companies that solve a problem, serve a >>large market<< and are managed by a nimble >>founder<<—“Bet on the jockey, not the horse,”]]>aging books Alan_Patricof investors longevity memoirs seniorpreneurs vc venture_capital demographic_changes entrepreneurship founders hard_problems large_markets nimbleness old_age problem_solvinghttps://pinboard.in/https://pinboard.in/u:jerryking/b:9eea8ebd3c2f/Opinion | What if You Could Give Start-Up Money to People, Not Companies?2022-09-22T23:36:29+00:00
https://www.nytimes.com/2022/09/02/opinion/libermans-humanism.html
jerrykingcapitalization cash-strapped Colleges_&_Universities entrepreneur family family_business hedging human_capital income-sharing inventors investors invest_in_the_young personal_beta personal_finance Peter_Coy quantified_self Sam_Altman securitization siblings Snap Snapchat start_ups students test_marketing track_records Y_Combinator young_people Russian-Americanshttps://pinboard.in/https://pinboard.in/u:jerryking/b:202ffa47b1a4/‘Cable Cowboy’ John Malone Sees More Streaming Bundles Ahead - The New York Times2022-08-25T22:53:14+00:00
https://www.nytimes.com/2022/08/21/business/media/john-malone-streaming-bundles-cable.html
jerrykingCATV entertainment_industry investors John_Malone mogulshttps://pinboard.in/https://pinboard.in/u:jerryking/b:46f64f80ea88/Julian Robertson, 90, Dies; Brought Hedge Funds Into the Mainstream2022-08-25T08:48:45+00:00
https://www.nytimes.com/2022/08/23/business/julian-robertson-dead.html
jerrykingdynasties hedge_funds investors Julian_Robertson obituaries open_mind philanthropy Tiger_Management Wall_Street short_sellinghttps://pinboard.in/https://pinboard.in/u:jerryking/b:4f1502b80f3f/Tom Alberg, Early Amazon Investor, Cultivated Tech Startups2022-08-12T16:05:49+00:00
https://www.wsj.com/articles/tom-alberg-early-amazon-investor-cultivated-tech-startups-11660312813?mod=hp_lista_pos4
jerrykingAmazon angels investors lawyers obituaries Seattle start_upshttps://pinboard.in/https://pinboard.in/u:jerryking/b:c06674043342/Venture capital’s silent crash: when the tech boom met reality | Financial Times2022-08-02T19:51:13+00:00
https://www.ft.com/content/6395df7e-1bab-4ea1-a7ea-afaa71354fa0
jerryking>FOMO<<--the “fear of missing out” ...brought a stampede at the peak of the market. It wasn’t just the high prices investors were prepared to pay not to miss the boat: periods for conducting due diligence were drastically shortened and protections that investors usually build in to protect their investments fell by the wayside.
The steady economic expansion and relaxed financial conditions that followed the financial crisis more than a decade before had led many investors to view venture capital as a one-way bet.....“Over the last 12 years, the right answer for almost every company was just to hold, and distribute [the shares] later,”.
“The incentives were lined up for keeping companies private and doing bigger and bigger rounds” of funding .......For company founders and employees, as well as the venture firms that backed them and the >>limited partners<< that supplied the capital, it looked like a gravy train. As valuations ratcheted higher, companies set up share-trading programmes for employees and executives to cash in, and investors were able to mark up their valuations with each new round of capital.
As a result, according to Vishria, the venture capital industry became bloated. Many companies stayed private far longer than was usual for a start-up, drawing on private investors rather than moving to the stock market. The size of venture funds exploded as investors put ever-larger amounts of capital to work. And investment discipline was loosened, with VCs spreading their bets widely across entire sectors rather trying to single out the small number of big winners that had traditionally provided the lion’s share of the industry’s profits.
The new investors that set the tone as venture investments ballooned included SoftBank’s Vision fund, which ploughed $100bn into the market. Tiger Global, which spread its bets widely, at one stage held more stakes in $1bn start-ups than any other investor. Both have since disclosed shattering losses: the Vision Fund registered a one-year loss of $27bn in May, the same month it emerged that Tiger had lost $17bn.
At the height of the boom, investors raced to back everything from electric vehicle companies like Rivian, which raised more than $5bn last year, to fringe tech bets that gambled on significant scientific breakthroughs to generate a return, such as >>nuclear fusion<<. “The inbound [interest] was insane,” with two or three unprompted offers of financing a week, says Jeremy Burton, a former top Oracle executive who now heads a private software company called Observe. Those approaches have stopped, he adds — a reflection of the deep chill that has fallen over the venture market as entrepreneurs and investors wait for reality to sink in and a new consensus about valuation levels to take hold.
High-risk projects
The surfeit of capital pushed new fields of science forward at a faster pace. They included technologies like quantum computing and driverless cars, “moonshot” projects that were once considered too risky or long term even for venture capital funds, which typically take a seven- to eight-year view. Significant headway has been reported by start-ups in both fields, though the truly transformative breakthroughs that venture investors hoped for remain out of reach.
That treasure chest also helped to open up risky new sectors of the economy to private start-ups. The amount of money flowing into commercial space start-ups, for instance, doubled last year to more than $15bn, according to BryceTech. In the middle of the last decade, annual investments were around $3bn a year.
Private investment has backed a flurry of novel rocket technologies, satellite systems and earth imaging services. But start-ups have also ventured on to the frontier of space exploration......With Nasa planning a return to the moon, private companies hoping to ride in its wake are already plotting lunar activities that range from mining to building cloud computing centres.
“There’s a lot more commercial activity” in areas of space exploration and research that were once considered the province of governments,......If the money dries up,......“I don’t know if it’s going to be sustainable.” Back on Earth, venture investors have been left reassessing bets in fields that were once considered among the hottest fields for start-ups. Howard Morgan, chair of New York venture firm B Capital, singles out the tech industry’s various attempts to revolutionize the transport sector as one cause of regret. The driverless car and electric scooter companies his firm invested in no longer look like they’re about to change the world.
One company B Capital invested in, scooter company Bird, was valued at nearly $3bn at the start of 2020. After going public late last year, and taking the total amount of outside capital it has raised to nearly $900mn, Bird is now worth just $142mn. “We’ve realized maybe the world isn’t ready for as many of these things as we thought,” says Morgan. Asked which sectors are likely to prove the biggest disappointments, most venture investors list the same handful: the ultrafast delivery companies, like Gopuff and Gorillas, that have set out to bring customers their grocery items in as little as 20 minutes; fintechs that embarked on an expensive campaign to build large consumer businesses; and blockchain-based ventures that have been caught up in the crypto crash.
In a recent presentation to its own investors, Coatue depicted the tumbling valuations it expects in the tech world as a series of dominoes [i.e. = "domino effect"] that are only just starting to topple...... big losses spreading, starting with unprofitable internet companies and reaching deeper into the crypto and fin-tech sectors, before eating into more solid-seeming sectors like software and semiconductors. If predictions are correct, then investors who placed the bulk of their latest funds to work at the peak of the market could be facing the sort of negative returns that have not been seen since the dotcom crash at the turn of the century.
In venture, timing is everything. The median venture fund that was raised in 1996, when the first internet boom was just gathering steam, returned 41 per cent a year over its life, according to Greenwich Associates, which tracks fund performance. But the median fund raised in 1999, at the peak of the bubble, went on to suffer a loss of 3%/yr. A repeat of that performance could drive away many of the new investors who have recently been drawn to the market. Yet even if some, like SoftBank and Tiger Global, end up being less significant forces in future, several VCs predicted that the big investors who backed those firms will look for other vehicles to invest in, meaning that competition for investments will remain high.
Resetting expectations
For most tech start-ups, meanwhile, the world has just changed drastically.
With a large amount of cash still sitting in existing venture funds, start-ups with proven businesses that are at no immediate risk from a weakening economy can still look forward to raising money on favourable terms........But most have little choice but to adjust their goals. The boom in capital-raising has left many with plenty of cash in the bank to get through two or three years of a funding drought. Yet uncertainty about when capital will next be freely available, and on what terms, has fostered an inevitable caution.
Instant delivery company Gopuff, which raised $3.4bn before the venture wave crested, is among the many well-capitalized start-ups that have moved in recent weeks to lay off staff and close facilities to conserve cash. According to one Gopuff investor, the basic unit economics of its business — the amount of revenue it can generate on each order, relative to what that order costs — are sound. But, this investor added, the expensive race for growth that was once the goal of start-ups like this no longer makes sense when capital becomes constrained. A similar calculation is being made across the start-up world. Payback periods are shortening. Hyper-growth is no longer the order of the day.
In recent years, investors became accustomed to seeing successful software start-ups tripling their revenues in the early years, .......With the reset in expectations...... “I’m not sure that still holds.” When his company gets past its early phase of product development and is ready to ramp up its marketing spending, he is already anticipating a less frenetic dash for growth: “It may be more measured or more economical growth, rather than growth at any cost.” “There’s no question, growth at any price is gone for the next few years,”.
For venture investors, it may sound like a big step back after the go-go years that are coming to an end. Yet there is a reason for the equanimity many profess: a reset brings with it the chance to pay lower prices for future investments, to back start-ups that show greater financial discipline, and to face less competition from rival start-ups funded by deep-pocketed interlopers like SoftBank......... “All the pretenders and the speculators will get wiped out. We’ll have the believers and the builders.” It’s an appealing vision that many venture investors — by definition among the professional world’s greatest optimists — subscribe to. But it is still far from clear how long it will take the venture capital market to reset, or how many of today’s investors and start-ups will still be standing when it does.
]]>anchoring breakthroughs delivery_services delivery_times denials domino_effects down_rounds due_diligence economic_downturn entrepreneur expectations FOMO founders investors IPOs Josh_Wolfe Klarna Lux_Capital market_crashes moonshots private_markets public_markets realities Richard_Waters SoftBank space_exploration start_ups Tiger_Global unheralded valuations vc venture_capital nucelar_fusion limited_partnershipshttps://pinboard.in/https://pinboard.in/u:jerryking/b:d6ba74c1e129/Tech investors are prizing cash generation again2022-07-30T19:12:52+00:00
https://www.economist.com/finance-and-economics/2022/06/09/tech-investors-are-prizing-cash-generation-again
jerrykingcash cash-generative cash_flows investors valuations Warren_Buffetthttps://pinboard.in/https://pinboard.in/u:jerryking/b:b9b4f8ed18a6/Opinion: Suncor shakeup should have been led by the board, not an activist hedge fund - The Globe and Mail2022-07-20T18:07:40+00:00
https://www.theglobeandmail.com/business/commentary/article-suncor-shakeup-should-have-been-led-by-the-board-not-an-activist-hedge/
jerryking>shareholder value.<<” The group expects to finish this work by December and Suncor’s agreement with Elliott states their findings will be made public. Where was this sort of urgency prior to the Florida fund manager’s campaign?
When Elliott arrived at Suncor, it encountered a board chockablock with retired CEOs. The activist arrived at a company owned by major institutions – Fidelity, Mackenzie and RBC Global Asset Management. Those two groups – directors and institutional shareholders – are charged with overseeing governance at Suncor. In the wake of Elliott’s successful campaign, they now look >>complacent<<.
Mr. Singer, Elliott’s 77-year-old co-CEO, has made a US$4-billion-plus fortune over four decades by shaking up companies. After a three-month battle with Suncor, he’s claimed another prize. How can activists like Mr. Singer keep winning showdowns when all they’re doing is posing the questions that boards and long-term shareholders are meant to ask?
]]>Andrew_Willis boards_&_directors_&_governance conglomerates divestitures Elliott_Management energy financiers gas_stations hedge_funds institutional_investors investors oil_industry Paul_Singer Petro-Canada shareholder_activism Suncor under-performing workplace_fatalities complacency shareholder_value workplace_safety value_extractionhttps://pinboard.in/https://pinboard.in/u:jerryking/b:7e13eee76a9b/Insight Partners Links Corporate Tech Chiefs With IT Startups - WSJ2022-07-17T18:04:18+00:00
https://www.wsj.com/articles/insight-partners-links-corporate-tech-chiefs-with-it-startups-11657884601?mod=hp_minor_pos4
jerrykinginvestorshttps://pinboard.in/https://pinboard.in/u:jerryking/b:6b124d1634ad/Crypto collapse reverberates widely among black American investors2022-07-06T15:00:29+00:00
https://www.ft.com/content/47d338e2-3d3c-40ce-8a09-abfa25c16a7f
jerrykingAfrican-Americans crypto-currencies diversity finance investors celebrities unsophisticatedhttps://pinboard.in/https://pinboard.in/u:jerryking/b:32212f8b1bdf/Pro-Entropic Investing - Colossus®2022-06-23T15:49:20+00:00
https://www.joincolossus.com/episodes/71060298/gracias-pro-entropic-investing?tab=transcript
jerrykingantifragile closed_systems constraints founders investors podcasts pivate_equity pro-entropic Colossushttps://pinboard.in/https://pinboard.in/u:jerryking/b:0680446d3a9c/Angel Investors Ontario - Our Team2022-06-21T11:32:56+00:00
https://www.angelinvestorsontario.ca/about/our-team
jerrykingangels investors Ontariohttps://pinboard.in/https://pinboard.in/u:jerryking/b:a5d8b6ca5f57/Bill Gates Says NFTs and Crypto Are ‘100%’ Based on Greater Fool Theory2022-06-17T19:23:49+00:00
https://www.wsj.com/articles/bill-gates-says-cryptocurrencies-and-nfts-are-100-based-on-greater-fool-theory-11655302143?page=1
jerrykingbillgates crypto-currencies digital_assets greater_fool_theory investors NFTs overvaluedhttps://pinboard.in/https://pinboard.in/u:jerryking/b:f6ab5a4a2dca/VCs Target AI Accounting Startups as Companies Look to Control Spending in Uncertain Economy2022-06-15T04:42:40+00:00
https://www.wsj.com/articles/vcs-target-ai-accounting-startups-as-companies-look-to-control-spending-in-uncertain-economy-11655151883?mod=hp_minor_pos4
jerrykingaccounting artificial_intelligence investors software start_ups vc venture_capitalhttps://pinboard.in/https://pinboard.in/u:jerryking/b:f5252f907c8a/Silicon Valley Investors Give Startups Survival Advice for Downturn - WSJ2022-05-30T03:42:18+00:00
https://www.wsj.com/articles/silicon-valley-investors-give-startups-survival-advice-for-downturn-11653822000?mod=hp_lead_pos4
jerryking> Venture-capital firms tell portfolio companies to buckle down for the long haul; ‘before you thrive, you have to survive’<<
In recent online slide presentations, blog posts and social-media threads, venture-capital doyens including Lightspeed Venture Partners, Craft Ventures, Sequoia Capital and Y Combinator are telling the founders that they need to take emergency action for what could be the sharpest turn in more than a decade. Their advice includes cutting costs, preserving cash and jettisoning hopes that hedge funds or other investors will swoop in with big checks......“The boom times of the last decade are unambiguously over,”....The investors’ admonitions are a departure from the growth-above-all mantra for startups in recent years, and come as the venture market is showing signs of sputtering......Startup investors have sounded alarm bells in previous moments of financial and economic tumult, including the start of the Covid-19 pandemic. But partners at venture funds say the current situation is different. In past downturns, the Federal Reserve cut rates and pumped money into markets to support the economy, providing liquidity and cheap capital. This time, the central bank has been raising rates and taking money out of the system in a bid to tame inflation.......The Fed’s moves are making capital more expensive, and increasing the pressure on companies to preserve their cash. “I would be planning to ride this thing out for at least 18 months or more,” Fred Wilson, co-founder of Union Square Ventures,
]]>advice Bill_Gurley culling economic_downturn Fred_Wilson investors recessions Silicon_Valley survival_strategies triage vc venture_capital cash_preservationhttps://pinboard.in/https://pinboard.in/u:jerryking/b:fd02da4197d9/Crypto Meltdown Exposes Hollowness of its Libertarian Promise2022-05-18T19:02:37+00:00
https://www.wsj.com/articles/crypto-meltdown-exposes-hollowness-of-its-libertarian-promise-11652875201?mod=wsjhp_columnists_pos1
jerrykingasset_classes Bitcoin bubbles caveat_emptor central_banks consumer_protection crypto-currencies digital_currencies financial_system Greg_Ip inflation intrinsic_value investors laissez-faire libertarians Peter_Thiel ransomware regulations regulators stocks wealth_destructionhttps://pinboard.in/https://pinboard.in/u:jerryking/b:a355192448e8/The Biggest Problem With Flying Cars Is on the Ground2022-05-14T19:56:33+00:00
https://www.wsj.com/articles/the-biggest-problem-with-flying-cars-is-on-the-ground-11652500850?mod=wsjhp_columnists_pos1
jerrykingair_taxis Christopher_Mims eVTOLs investors start_upshttps://pinboard.in/https://pinboard.in/u:jerryking/b:3ce63792868c/Storied VC says investors are unlearning the lessons of the last bull market. Jeff Bezos says you should listen.2022-05-02T14:58:00+00:00
https://www.marketwatch.com/story/storied-vc-says-investors-are-unlearning-the-lessons-of-the-last-bull-market-jeff-bezos-says-you-should-listen-11651488831?mod=hp_minor_pos25&adobe_mc=MCMID%3D30158439511223414360741102191342543483%7CMCORGID%3DCB68E4BA55144CAA0A4C98A5%2540AdobeOrg%7CTS%3D1651489637
jerryking>free cashflow<<] and earnings. Facebook trades at 14X GAAP & is growing 23%. What earnings multiples are you assuming?
Revenue & earnings QUALITY matter.
Gurley linked to his blog from 2011, where he explained that discounted cash flows “are the true drivers of value for any >>financial asset<<, companies included,” and that price/revenue is a “dangerous technique because all revenues are not created equal.”
Among those reacting to Gurley was Amazon AMZN, -3.00% founder Jeff Bezos, whose stock is facing its worst year since 2008, after the company’s first loss in seven years:
]]>Benchmark Bill_Gurley bull_markets deteriorating_systems elder_wisdom hard_times investors Jeff_Bezos market_corrections never_forever technology unlearning vc venture_capital warning_signs worldviews valuations generational_blinders anchoring free_cash_flow financial_assetshttps://pinboard.in/https://pinboard.in/u:jerryking/b:c6caf6538cef/Thirty Years Reflections on the Ten Attributes of Great Investors2022-04-26T17:16:15+00:00
https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&source_id=em&document_id=1063945621&serialid=1wRGyN6EnJdsEAzicRfCQyDmuExS84d2HcYRBRMNZJ8%253d
jerryking>Wall Street<<, >>Michael Mauboussin<< wrote this unsurprisingly excellent piece on the common characteristics shared by great investors. His list of influential books on page 17 is worth a look, too.......What Next? It is harder than ever to generate excess returns in the investment management business. The main explanation for the rising difficulty is an idea we call the “paradox of skill.” The paradox says that in some activities, as skill increases luck becomes more important in determining outcomes. The key insight is differentiating between absolute and relative skill. Absolute skill in investing, which includes bright investors working hard using vast amounts of data and incorporating ideas from the latest research, has never been higher. Relative skill, on the other hand, appears to be narrowing. The difference between the best and the average is less today than it was a generation or two ago.
We see this clearly when we examine the standard deviation of excess returns for mutual funds, which has declined steadily for a half century. The massive shift in >>asset allocation<< away from >>active investing<< toward >>passive investing<< exacerbates this effect. Thirty years ago, >>index funds<< were less than 1% of assets under management, and today they (along with other passive vehicles such as exchange-traded funds) are about one-third. Think of it this way: For you to have positive alpha, the industry’s term for risk-adjusted excess return, someone has to have negative alpha of the same amount. By definition, alpha for the market must equal zero (before fees). So you want to compete against less-skilled investors because they are your source of alpha. It is disadvantageous for you if the weak players flee the market (selling their stocks and buying index funds), or if the least capable professional investors lose assets to passive funds, because it means that only the smartest investors remain in the active game. The truth is that weak players, whom the strong players require to generate excess returns, are fleeing at a record pace. Still, here are a couple of suggestions for active managers to contemplate. The first is to consider carefully where your skill will be most valuable. More than 25 years ago, Richard Grinold spelled out the “fundamental law of active management.”38 The non-technical interpretation says that excess returns equal skill times opportunity. All the skill in the world is for naught unless you have an opportunity to apply it. Before figuring out how you will win the game, figure out which game to play.
]]>Bayesian biases booklists books character_traits independent_viewpoints investing investors Michael_Mauboussin numeracy open_mind passive_investing reading reflections Charlie_Munger update_your_priors active_investing asset_allocation index_funds Wall_Streethttps://pinboard.in/https://pinboard.in/u:jerryking/b:3341916f1bdc/Power Corp. of Canada buys Lios Partners to create new agri-food private equity fund2022-04-01T02:02:57+00:00
https://www.theglobeandmail.com/business/article-power-corp-of-canada-buys-lios-partners-to-create-new-agri-food/
jerrykingagribusiness agriculture agritech Andrew_Willis buyouts clans financiers food foodservice food_tech investors LBOs mid-market Power_Corp. private_equity sustainabilityhttps://pinboard.in/https://pinboard.in/u:jerryking/b:b986e67a6092/How Investors Can Keep Crypto Assets Safe2022-03-21T00:25:42+00:00
https://www.wsj.com/articles/how-investors-can-protect-crypto-assets-11647445341?mod=lead_feature_below_a_pos1
jerrykingdigital_assets investors NFTs safekeeping crypto-currencieshttps://pinboard.in/https://pinboard.in/u:jerryking/b:99125d01a544/M.B.A.s’ Latest Pitch to Investors: Skip the Startup, Invest in Me - WSJ2022-03-21T00:22:10+00:00
https://www.wsj.com/articles/m-b-a-s-latest-pitch-investors-startup-business-school-spac-11647457255?mod=hp_lead_pos11
jerrykinginvestors MBAs search_fundshttps://pinboard.in/https://pinboard.in/u:jerryking/b:8df580a82587/Sifted | Startup Europe explored through grown up reporting.2022-03-11T21:57:02+00:00
https://sifted.eu/
jerrykingangels EU Europe investors start_ups vc venture_capital websiteshttps://pinboard.in/https://pinboard.in/u:jerryking/b:6c3e7bdd32ad/Publicizing Failure: We All Make Mistakes. Not Everyone Fixes Them2022-03-11T16:43:42+00:00
https://www.robertglazer.com/friday-forward/rivian-automotive-apology/
jerrykinganti-portfolios apologies categorization cognitive_dissonance coverletters error_correction flip-flopping humility investors in_the_public_eye leaders lessons_learned misjudgement mistakes open_mind post-mortems public_acknowledgment quotes Robert_Glazer transparency trust-building vc venture_capital vulnerabilities backlash blowback contrition failure_denialhttps://pinboard.in/https://pinboard.in/u:jerryking/b:087a430f105f/How to Invest With Certainty in an Uncertain World - The Wall Street Journal Google Your News Update - WSJ Podcasts2022-03-04T06:56:03+00:00
https://www.wsj.com/podcasts/google-news-update/how-to-invest-with-certainty-in-an-uncertain-world/c7c36870-da45-435a-a084-6d1f87e68122?page=1
jerryking>self-honesty<< to say I was certain last week. And now I'm certain this week. And I was certain about things that were completely contradictory. Maybe I shouldn't be so certain. You know, all it took was one geopolitical bolt from the blue to transform most people's forecasts about an uncertain event. And they took one form of certainty and replaced it with another just like that. And I think what that should tell investors is it's much better to think in terms of **probabilities and ranges of outcomes** [i.e. = "possibility space"] than it is to think about a particular point [i.e. = "point solutions"], you know? And everyone would be better off being a lot more humble [i.e. = "be less certain"/"doubt"/"humility"]] about the ability of professional forecasters to call what's going to happen next.
J.R. Whalen: And so what lessons can smaller investors learn from the big investment houses that made wholesale changes to their portfolios based on what they think is going to happen?
Jason Zweig: Well, so if you're a professional money manager, you get paid to make predictions [i.e. = "forecasting"] and to act on them. You know, if you have a forecast about where the market is headed, you pretty much have to follow through on it. If you're a small investor, you don't. You can recognize that your view of the world might well be proven wrong and nobody's staring over your shoulder who's going to judge you if your forecast turns out to be wrong or you don't act on it.[i.e. = "changing your mind"/"updating your priors"] So you have that great advantage of being able to say to yourself, well I think I know what might happen. But not necessarily having to change your investment portfolio based on it. And professionals don't have that luxury.
J.R. Whalen: All right. But not every investment is going to go as planned, geopolitical mess or not. And many investors won't be able to resist buying in an unsettled market. So what kind of mindset should they have? You know, what steps can they take to be smarter and not risk seeing their portfolio suffer substantial losses?
Jason Zweig: Well, I think one of the biggest problems investors face is making a mistake and not being willing to admit it, not fessing up when you did something wrong because it's painful. I mean, nobody wants to admit that they did something that turned out to be foolish. And one technique that I really like and I have advocated is you could imitate General Dwight D. Eisenhower who on the eve of D-Day wrote a press release that fortunately for the future of civilization he never had to use, which was called In Case of Failure. And what he did was he wrote the statement that he would read to the press if the D-Day invasion was a flop. He took responsibility for the mistake and he said it was his fault alone. And he was prepared to admit he was wrong before he even knew whether he would turn out to be right. And so before you make a big trade that might make a big difference to your portfolio results, it'd be a good idea to think about writing a note [i.e. = a "pre-mortem"] that said something like this investment has been a **failure**, so I have to sell. I based it on information that I believed at the time to be valid, but I was wrong because, and then you have to fill in the blank. Why were you wrong? And, of course, you would know because you would have hindsight. And then you could finish by saying it was a bad investment, but that doesn't make me a bad investor. It's very important to give yourself that out, to recognize in advance that you're going to make mistakes and it's okay to make mistakes. And that will enable you, I think, more easily to admit when you do make one. And that can give you the flexibility to exit and reverse a decision that hasn't worked out well a lot more easily because you haven't invested as much of yourself in it, so it would be easier for you to let go.
J.R. Whalen: But Jason, people all day will see forecasts and pundits giving their opinion on everything from the Fed, to what Russia will do, to the Chinese economy, to the U.S. economy. So what can an investor who's trying to manage their savings and their 401(k) do when they're just being beaten over the head with all of this stuff [i.e. ="financial pornography"], oftentimes at a very loud volume, all day?
Jason Zweig: One approach that I think is effective, at least for people who have some investing experience is to look back. If you've been in the markets for quite a while, look back 10 years or five years, or if you're new to the markets, look back one year. See if you can remember what investment decisions you made exactly one year ago, or five years ago, or 10 years ago, or even imagine making an investment decision in the past at those points. [Reminiscent of Suzy Welch’s 10-10-10 rule. When you’re about to make a decision, ask yourself how you will feel about it 10 minutes from now? 10 months from now? and 10 years from now? People are overly biased by the immediate pain of some choice, but they can put the short-term pain in long-term perspective by asking these questions]. And then ask yourself what decision could I have made that would've made a big difference to my portfolio results today? And if you put it in longer-term perspective, you're likely to realize that there wasn't much you could have done at the time that would've made a significant difference to your performance, which tells you that except in extraordinary turning points in market history, which can be very hard to recognize in any case, most decisions that people make are likely to make very little difference to their overall returns.
]]>certainty change_your_mind Cromwell’s_Law doubt fast-changing geopolitics howto humility invasions investing investors Jason_Zweig possibility_space probabilities Russia Ukraine uncertainty volatility decision_making Dwight_Eisenhower failure financial_pornography forecasting mistakes pre-mortems Suzy_Welch update_your_priors failure_denial self-honesty point_solutionshttps://pinboard.in/https://pinboard.in/u:jerryking/b:4fefdae8da04/Home - FFTT Tree Rings2022-02-26T09:19:49+00:00
https://fftt-treerings.com/
jerrykingRana_Foroohar biases connecting_the_dots decision_making investment_advice investment_research investors subscriptions the_big_picture newsletters Tree_Ringshttps://pinboard.in/https://pinboard.in/u:jerryking/b:d3964b1a124f/Peter Thiel, the Right’s Would-Be Kingmaker2022-02-14T18:47:27+00:00
https://www.nytimes.com/2022/02/14/technology/republican-trump-peter-thiel.html
jerryking>conspiracy theories<< espoused by Mr. Trump and who cast themselves as rebels determined to overthrow the Republican establishment and even the broader American political order. These campaigns have raised millions in small-dollar donations, but Mr. Thiel’s wealth could accelerate the shift of views once considered fringe to the mainstream — while making himself a new power broker on the right.
The candidates Mr. Thiel has funded offer a window into his ideology. While the investor has been something of a cipher, he is currently driven by a worldview that the establishment and globalization have failed, that current immigration policy pillages the middle class and that the country must dismantle federal institutions.
Mr. Thiel .....has taken issue with what he calls the “extreme dogmatism” within establishment institutions, which he said had sent the country backward....
At an October dinner.... he spoke about the “deranged society” that “a completely deranged government”....The United States was on the verge of a momentous correction, he said......Mr. Thiel has set his sights on reshaping the Republican agenda with his brand of anti-establishment contrarianism, said Stephen K. Bannon.
As a venture capitalist, Mr. Thiel branded himself as a contrarian. He published philosophical essays, often dark musings on politics, technology, Christianity and globalization.
In one 2009 piece, Mr. Thiel, who called himself a libertarian, wrote that he had come to “no longer believe that freedom and democracy are compatible,” arguing that American politics would always be hostile to free-market ideals, and that politics was about interfering with other people’s lives without their consent. Since then, he has hosted and attended events with white nationalists and alt-right figures.
++++++++++++++++++++++++++++++++++++++
power "behind the throne" = "shadow power"
]]>alt-right bankrolling conservatism conspiracies contrarians Donald_Trump financiers foundations funding GOP high_net_worth ideologies ideas investors kingmakers libertarians MAGA moguls patronage PayPal Peter_Thiel philanthropy political_campaign_financing political_power politics power_brokers right-of-center right-wing Steve_Bannon stewardship think_tanks Trumpism shadow_power conspiracy_theorieshttps://pinboard.in/https://pinboard.in/u:jerryking/b:916cc99ea923/They Made Millions on Luna, Solana and Polygon: Crypto’s Boom Beyond Bitcoin2022-02-07T17:06:20+00:00
https://www.nytimes.com/2022/02/07/technology/cryptocurrency-luna-solana-polygon.html?action=click&module=Well&pgtype=Homepage§ion=Business
jerrykingbitcoin blockchain crypto-currencies investors speculation speculatorshttps://pinboard.in/https://pinboard.in/u:jerryking/b:848d37a8c8c0/Startup That Models Materials at Atomic Level Raises Seed Capital - WSJ2022-02-06T22:43:09+00:00
https://www.wsj.com/articles/startup-that-models-materials-at-atomic-level-raises-seed-capital-11643976001?mod=hp_minor_pos4
jerrykingartificial_intelligence atoms_&_bits materials modelling seed-stage start_ups funding investors vc venture_capitalhttps://pinboard.in/https://pinboard.in/u:jerryking/b:298edef34e8b/Startup Investors Cut Valuations Amid Tech Stock Rout, Dismal IPOs - WSJ2022-02-03T04:20:15+00:00
https://www.wsj.com/articles/red-hot-startup-market-starts-to-chill-as-investors-turn-on-tech-stocks-11643718783?mod=lead_feature_below_a_pos1
jerrykinginvestors start_ups valuations vc venture_capitalhttps://pinboard.in/https://pinboard.in/u:jerryking/b:4af1cb2a133e/The Calculators Behind the Music-Catalog Megadeals2022-01-20T10:44:14+00:00
https://www.wsj.com/articles/the-calculators-behind-the-music-catalog-megadeals-11642597204?mod=business_featst_pos1
jerryking>limited partner<< class, or whether there’s going to be interest in SPACs.
WSJ: We’re seeing artists sell their life’s work at the same time we see this broader fight for artists to control and own their work. How should we reconcile this?
Ms. Matsuura: One way of managing that tension is to negotiate such that the artist gets to keep a percentage, so they don’t feel like they’re giving away their entire baby.
Mr. Massarsky: There is a class of artists that is successful and wants to monetize their assets and prepare themselves for the future. They are giving up the risk of anything that will happen to their future royalty streams by getting their money today. The investors are taking that risk on because they see the opportunity value going forward. That’s a pretty sophisticated business thought, and it isn’t always on the minds of many younger artists who are frankly just a bit more concerned about fairness and equity.
]]>alternative_assets artists classics copyrights cultural_touchpoints deal-making economists financial_instruments generational_touchstones hits investors legacy_artists music music_catalogs music_licensing royalties singers songs songwriters streaming superstars valuations uncorrelated professional_services_firms limited_partnershipshttps://pinboard.in/https://pinboard.in/u:jerryking/b:635dfd149ff9/Meet the Investor Who Spots Opportunities for Jeffrey Katzenberg2022-01-20T00:24:55+00:00
https://www.wsj.com/articles/meet-the-investor-who-spots-opportunities-for-jeffrey-katzenberg-11642341603?page=1
jerrykingbird-dogging early-stage investors Jeffrey_Katzenberg moguls start_ups vc venture_capital opportunities scoutinghttps://pinboard.in/https://pinboard.in/u:jerryking/b:541a38678bdd/Not all NFTs are equal - here's how to guide clients on digital assets2022-01-19T16:03:04+00:00
https://notes.pinboard.in/u:jerryking/d99f5ce00b8b7939a184
jerrykingart avatars blockchain celebrities collectibles crypto-currencies digital_assets digital_wallets investors metaverse NFTs one-of-a-kind real_estate risks uniquenesshttps://notes.pinboard.in/https://pinboard.in/u:jerryking/b:bd6520f7592a/Subscribe to read | Financial Times2022-01-08T01:57:59+00:00
https://www.ft.com/content/43926b62-0b92-44c1-9f7f-e74e81144a9a
jerrykinginvestors bird-dogging scoutinghttps://pinboard.in/https://pinboard.in/u:jerryking/b:cf617d2b0005/A Booming Startup Market Prompts an Investment Rush for Ever-Younger Companies2022-01-06T12:28:06+00:00
https://www.wsj.com/articles/a-booming-startup-market-prompts-an-investment-rush-for-ever-younger-companies-11641119403?page=2
jerrykingbubbles early-stage Fred_Wilson funding investors Sam_Altman start_ups Tiger_Global Union_Square_Ventures valuations vc venture_capitalhttps://pinboard.in/https://pinboard.in/u:jerryking/b:25d7165b290f/Investors must be ready to change their minds in 20222022-01-01T14:35:52+00:00
https://notes.pinboard.in/u:jerryking/05fc1624978215b6acff
jerrykingadvice change_your_mind investors pandemics U.S._Federal_Reserve uncertainty inflationhttps://notes.pinboard.in/https://pinboard.in/u:jerryking/b:077e8088c254/Big screen bets: novel platforms for investors in indie film2021-12-23T05:01:41+00:00
https://www.ft.com/content/d4924a75-aec8-49fe-856a-f5e062ed71f8
jerrykingblockbusters entertainment_industry films filmmakers financiers financing funding investors joint_ventures movies nonprofit platforms private_equity producers producer_mindset risk-aversion risk-sharing studios timidity Warner_Bros.https://pinboard.in/https://pinboard.in/u:jerryking/b:cf581f4d9ce5/Family offices become serious rivals to VC firms for funding start-ups2021-12-23T04:15:24+00:00
https://www.ft.com/content/26545fd5-8751-461c-9715-9e14eadcce95
jerryking>Domain expertise<< and access to great companies is where differentiation is. Family Offices rarely have either but often have the capital which is why they largely end up in the assets the VCs have no interest in.]]>family_office funding Sequoia start_ups vc venture_capital wealth_management Andreessen_Horowitz General_Catalyst investors Roelof_Botha permanent_capital domain_expertisehttps://pinboard.in/https://pinboard.in/u:jerryking/b:24f515b48ebd/Emergence of Canadian unicorns sparks momentum in angel investing2021-11-10T11:09:47+00:00
https://www.theglobeandmail.com/investing/globe-wealth/article-emergence-of-canadian-unicorns-sparks-momentum-in-angel-investing/
jerrykingangels Canada Canadian investors momentum unicornshttps://pinboard.in/https://pinboard.in/u:jerryking/b:77c1f2fac88f/Daniel Ek’s €1bn Europe tech investment group puts first stake in Helsing2021-11-09T16:09:40+00:00
https://www.ft.com/content/fc69f2b8-8016-4833-a9e1-61154e4b25eb
jerrykingartificial_intelligence battlefields China Daniel_Ek defence_contractors digital_warfare Eric_Schmidt EU geospatial Helsing In-Q-Tel investors liberal_democracies mapping NATO Prima_Materia real-time security_&_intelligence situational_awareness Spotify start_ups warfare game_designhttps://pinboard.in/https://pinboard.in/u:jerryking/b:e669b7f6863e/Biz Stone, Twitter co-founder, on being an investor that never lets go2021-11-06T18:56:04+00:00
https://www.ft.com/content/80b621ce-73e5-4cc4-9779-a34db1e6d644
jerrykingangels Beyond_Meat bird-dogging Biz_Stone eclectic emerging_markets food food_tech investors long-term_greedy nondairy NotCo plant-based Pinterest portfolios public_markets Slack Square time_horizons Twitter scoutinghttps://pinboard.in/https://pinboard.in/u:jerryking/b:a403401f823f/Climate tech 2.0 must sell venture capital on its future2021-10-22T14:18:55+00:00
https://www.ft.com/content/33df166e-d921-4c20-92dc-5e1b5a0e6773
jerrykingbounties breakthroughs climate_change green prizes vc venture_capital books investors Peter_Thiel climate_tech green_tech cleantechhttps://pinboard.in/https://pinboard.in/u:jerryking/b:f19b97ebcddc/Bands should learn from the Beatles and beware going solo2021-10-15T19:43:44+00:00
https://www.ft.com/content/114297a0-0c49-4218-a492-7c993b7579d5
jerryking>looked out for one another<< . . . and one thing would lead to another and people would go into rehab,” Springsteen said of the E Street Band.
Stars with solo careers were twice as likely to die prematurely as those in bands, a study of 1,489 performers found. Brian Jones drowned in his pool in 1969 shortly after leaving the Rolling Stones, and staying together turned out well for the others. Charlie Watts, the band’s former drummer, reached 80 before dying in August.
Today’s stars are surrounded by advisers, and have the advantage of learning from history, if they choose. But there is nothing like being brought to your senses by someone who knew you when you were nobody, no matter how valuable you have become.
]]>back_catalogs Beatles dissolutions documentaries music music_publishing singers solo songs songwriters Blackstone breakups Hipgnosis investors legacy_artists musicians music_catalogs music_industry rock_stars substance_abuse looking_out_for_each_otherhttps://pinboard.in/https://pinboard.in/u:jerryking/b:6aff31124dc3/The Alarming Rise of Peter Thiel, Tech Mogul and Political Provocateur - The New York Times2021-10-12T23:30:13+00:00
https://www.nytimes.com/2021/09/21/books/review/the-contrarian-peter-thiel-max-chafkin.html?searchResultPosition=1
jerrykingangels Ayn_Rand biographies books book_reviews coming-of-age contrarians Donald_Trump Facebook investors libertarians moguls Palantir PayPal Peter_Thiel Silicon_Valley Stanford Trumpism unsentimental bankrolling Virginia_Heffernanhttps://pinboard.in/https://pinboard.in/u:jerryking/b:9c29c1b5aeed/JAB seeks to raise $5bn fund to invest in petcare2021-10-08T12:12:35+00:00
https://www.ft.com/content/93a23966-1b26-4e7b-aa0c-9ff2654e9990
jerrykinginvestors private_equity deal-making fundraising JAB petcare petshttps://pinboard.in/https://pinboard.in/u:jerryking/b:3ba36f41bf93/After Hitting It Big With Photo Licensing, This Serial Entrepreneur Wants to Start More Companies - WSJ2021-10-03T21:37:07+00:00
https://www.wsj.com/articles/after-hitting-it-big-with-photo-licensing-this-serial-entrepreneur-wants-to-start-more-companies-11633147258?mod=hp_lista_pos5
jerrykingangels investors perseverance serial_entrepreneurhttps://pinboard.in/https://pinboard.in/u:jerryking/b:311d37d1564e/How Biology is Getting a Technological Makeover2021-09-17T03:55:03+00:00
https://www.nytimes.com/2021/09/16/technology/synthetic-biology.html?action=click&module=Well&pgtype=Homepage§ion=Technology
jerryking>fire sale<< prices, as biotech start-ups were folding in the wake of the national financial crisis.......Four of the founders were freshly minted Ph.D.s from the MIT — three in biological engineering, one in computer science. The initial funding came from the fifth founder, Tom Knight, who put up $150,000.[i.e. = "angels"]
Mr. Knight is a renowned computer engineer who became a founding pioneer of synthetic biology. At M.I.T., he designed hardware and software for time-sharing, operating systems, artificial intelligence and networking on the predecessor to the internet. But in his 40s, Mr. Knight decided the next open frontier for engineering innovation was in cells, more so than in silicon. So he spent years studying biology. In 1998, with backing from the Pentagon’s research arm, Mr. Knight started a lab at M.I.T. in what he called synthetic biology.......Ginkgo landed its first paying customer in 2014. Today, the company has dozens of customers across a variety of industries, including food, agriculture and pharmaceuticals. Its work varies depending on the customer. It can supply **expertise, enzymes or complete cells**........most Ginkgo projects are longer-term initiatives designed to greatly increase the efficiency or speed of a desired biochemical process in a cell. The company’s scientists begin by exploring its internal and public databases of DNA, as they seek to develop a more powerful enzyme, for example. Enzymes are the catalysts for chemical reactions in cells.
They might start with 100,000 similar enzymes and then select the 5,000 more promising ones to make. The 5,000 samples are then tested in the Ginkgo labs.
The resulting enzyme is often 10 times better at producing the desired effect than the enzyme the customer started with, the company says........Ginkgo’s automated labs span more than 100,000 square feet and have cost about $500 million so far. The company refers to its labs collectively as its foundry, a nod to the name used for computer chip-making contractors.
Ginkgo’s labs make its high-volume, rapid-experiment model possible.
“It’s not that we’re geniuses,” said Mr. Knight, who is a senior scientist and strategist at the company. “It’s a scale thing.”......Ginkgo is encouraging new biotech start-ups to piggyback on its technology, much as tech start-ups use Amazon Web Services to supply their underlying computing and data storage. ....Ginkgo collects money in different ways, including fees for use, royalties and equity stakes, depending on the customer....Ginkgo, by all accounts, is an innovative leader in synthetic biology. ...While Ginkgo is aiming to automate broad swaths of biology, the field is still largely hand craftsmanship. An estimated $33 billion was spent globally last year on cell engineering research by universities, government labs, biotech companies and large corporations. More than 60 percent of the spending was on labor with the rest for equipment, reagents and other materials. The labor share for Ginkgo projects is about 30 percent........The question is how much demand there will be, and how soon, for Ginkgo’s computer-style technology platform. The company and its investors are betting its moment has arrived.....
]]>10X angels Bayer Colleges_&_Universities DARPA databases DNA DNA_sequencing engineering enzymes funding gene_sequencing Ginkgo investors IPOs long-term Merck pharmaceutical_industry public_funding public_investments scaling Steve_Lohr synthetic_biology VC venture_capital academic_entrepreneurship MIT fire_saleshttps://pinboard.in/https://pinboard.in/u:jerryking/b:213f7eff125d/‘The Contrarian’ Goes Searching for Peter Thiel’s Elusive Core2021-09-15T22:46:08+00:00
https://www.nytimes.com/2021/09/13/books/review-contrarian-peter-thiel-silicon-valley-max-chafkin.html
jerrykingangels Ayn_Rand biographies books book_reviews coming-of-age contrarians Donald_Trump Facebook investors libertarians moguls Palantir PayPal Peter_Thiel Silicon_Valley Stanford Trumpism unsentimentalhttps://pinboard.in/https://pinboard.in/u:jerryking/b:8abdfb7a641e/Amazon aggregators are walking into the dragon’s cave |2021-09-10T04:33:43+00:00
https://www.ft.com/content/abbf6bc2-93f1-4cbc-b596-9a7e6f814cfb
jerryking>margin<< is my opportunity.”/"staying hungry"]
Amazon has many ways of **squeezing margins out of merchants** [i.e. = "supply chain squeeze"]. The ecommerce company entices as many sellers as possible on to its platform to sharpen price competition. It can modify its listing fees [i.e. = "fees & commissions"] or tweak its recommendation >>algorithms<< in unknowable ways to promote or demote sellers. It can spot emerging trends in its sales data and launch rival own-brand products.[i.e. ="private labels"]......in spite of these well-advertised dangers, billions of dollars have been pouring into specialist investment funds [i.e. = "buyouts"/"private equity"] to snap up some of the platform’s most popular small merchants....74 such roll-up funds have raised almost $9bn since April 2020, including Thrasio, Berlin Brands Group and Perch......Why are investors keen to swallow such glaring risks?........The sketchy answer tells us much about the rapidly evolving dynamics of online marketplaces as well as the desperation of footloose investors to dance in the digital economy. Some adaptable merchants have thrived in Amazon’s marketplace thanks to its immense reach and logistics infrastructure........If Amazon is in the business of profitably intermediating data flows [i.e. = "information flows"] then others can acquire useful data intelligence [i.e. = "market intelligence"] from its site, too. Savvy aggregator funds can snap up the best-selling small merchants and deepen their insights into Amazon’s algorithms [i.e. = "reverse_engineer"] . The Boston-based Thrasio, which has raised $1.8bn of funding, now owns 150 brands and a portfolio of 22,000 products. Its ambition is to become a consumer goods [i.e. = "CPG"] heavyweight, a new Procter & Gamble designed for the digital age........Thrasio’s director of acquisitions, is familiar with the risks of operating on Amazon’s platform: “You are building your house on someone else’s real estate. But you cannot ignore the fact that most business has moved on to their real estate.” That said, Thrasio argues it can still make money by boosting the sales and fattening the margins of the merchants it acquires by injecting capital, platform knowhow, marketing muscle and supply chain expertise.....By helping to “industrialize” Amazon’s fragmented merchant base and providing high-quality and reliable listings and services, Thrasio says it is delivering what Amazon wants, making it a valuable partner. Thrasio rejects the idea that any aggregators are yet big enough to change the power dynamics on Amazon’s marketplace. “We are little blemishes on the sun.”
As well as bulking up, merchants can devise other ways to reduce their vulnerability. One way, outlined in the HBR article, is for merchants to use Amazon as a shop window while building their own direct-to-consumer business through services, such as Shopify, which provides digital tools and infrastructure to more than 1m businesses. As Tobi Lütke, Shopify’s chief executive says: “Amazon is trying to build an empire. Shopify is trying to arm the rebels.” A more political route is to lobby increasingly activist regulators to help keep Amazon honest.[i.e. = "contra-Amazon"]
Many Amazon merchants might still conclude it is a great time to sell out to exuberant, cash-rich aggregator funds. For investors in some of those funds, however, the story could have a less happy ending. The smartest may make a good return by de-risking muscled-up merchants. But in so doing they will only further strengthen Amazon’s >> market dominance <<.
]]>aggregation Amazon COVID-19 e-commerce fees_&_commissions Jeff_Bezos platforms retailers roll_ups third-party Thrasio algorithms books brands buyouts CPG digital_economy information_flows investors power_dynamics private_equity private_labels recommendation_engines contra-Amazon direct-to-consumer domination lobbying lobbyists regulators Shopify vulnerabilities Tobias_Lütke fragmented_markets market_dominance staying_hungry margins market_intelligence reverse_engineering supply_chain_squeezehttps://pinboard.in/https://pinboard.in/u:jerryking/b:3289ff2c6a4e/She’s the Investor Guru for Online Creators - The New York Times2021-09-08T01:38:00+00:00
https://www.nytimes.com/2021/09/01/technology/li-jin-youtube-creators.html
jerrykingangels content_creators investors vc venture_capital women digital_influencers creative_economy creator_economyhttps://pinboard.in/https://pinboard.in/u:jerryking/b:0a914d79f338/Frictions arise between Wall Street and private equity clients | Financial Times2021-08-31T21:18:12+00:00
https://www.ft.com/content/28104651-e297-4371-b08d-7a10b590c4e8
jerrykingfrictions investment_banking investors private_equity Wall_Streethttps://pinboard.in/https://pinboard.in/u:jerryking/b:6baefb7dc4b2/African start-ups attract international investors — but need local ones too | Financial Times2021-07-15T13:52:31+00:00
https://www.ft.com/content/566fc2a5-6df4-4145-8157-99d4eb8da4c1
jerrykingAfrica Africans Aliko_Dangote corporate_investors developing_countries Facebook FairMoney fin-tech Google investors Nigerians payday_lending regulators South-South Strive_Masiyiwa U.S. unicorns vc venture_capital undersea_cables fiber-optics start_upshttps://pinboard.in/https://pinboard.in/u:jerryking/b:eb5640b0af71/The Meme Stock Fantasy Is Becoming a Reality for GameStop and AMC - WSJ2021-07-12T19:40:42+00:00
https://www.wsj.com/articles/the-meme-stock-fantasy-is-becoming-a-reality-for-gamestop-and-amc-11625823008
jerrykinginvestors online_communities social_media stockshttps://pinboard.in/https://pinboard.in/u:jerryking/b:63d5858c852e/