I've worked a long time in the secondary markets and I've written a fair bit about this problem (delayed IPOs, exclusion of public market investors), but I think there's a bit of ex post facto reasoning on here.
Companies like Palantir that have 10xed are "speculative"... but the for people in the 90s, "they still had the opportunity to invest in Google, Amazon or Microsoft at low valuations" ignores the fact that they were *equally* speculative at the time.
Companies are going public at 10x the valuations, but the markets are 10x bigger. Ten years ago, we didn't have a single $T company, but now we have 11 of them.
And as it has always been, the right move for 99% of investors is to invest in a broad index. The 25-year return of the S&P and the 10-year return of the S&P are, coincidentally, *identical* at 12.9% IRR (not including dividends).
I do agree that there are a whole host of other issues that pose structural issues with building wealth — the decaying value of a college education, AI taking all the knowledge work, what does money mean post AGI, student loans, etc.
But I've gradually come to the conclusion that the private markets concern — while something to address — isn't as much of a society-shaking issue as I previously thought.
Great article, loved it. I think you diagnosed a huge part of my psychology here.
The "no gamble, no future" ethos is difficult to trace.
Various LLMs say it comes from Poker, notably one Ren (Tony) Lin who adopted it as his catchphrase, but I recall hearing this in M:tG circles as early as 2008-09; so it was infiltrating the zeitgeist even back then. While impossible to unproblematically pin this psychological mode to any given culture, it would not surprise me if there's some East Asian influence at work here.
Whether it comes from outside or entirely home-grown, the United States (and the West more broadly) is now thoroughly suffused in this kind of thinking. One could also point to Taleb and his popularization of taking into account the long tails in probability distributions.
This way of being is pretty cursed and sociologically unsustainable (we see signs of this everywhere).
I've worked a long time in the secondary markets and I've written a fair bit about this problem (delayed IPOs, exclusion of public market investors), but I think there's a bit of ex post facto reasoning on here.
Companies like Palantir that have 10xed are "speculative"... but the for people in the 90s, "they still had the opportunity to invest in Google, Amazon or Microsoft at low valuations" ignores the fact that they were *equally* speculative at the time.
Companies are going public at 10x the valuations, but the markets are 10x bigger. Ten years ago, we didn't have a single $T company, but now we have 11 of them.
And as it has always been, the right move for 99% of investors is to invest in a broad index. The 25-year return of the S&P and the 10-year return of the S&P are, coincidentally, *identical* at 12.9% IRR (not including dividends).
I do agree that there are a whole host of other issues that pose structural issues with building wealth — the decaying value of a college education, AI taking all the knowledge work, what does money mean post AGI, student loans, etc.
But I've gradually come to the conclusion that the private markets concern — while something to address — isn't as much of a society-shaking issue as I previously thought.
Wonder how much of Nvidia’s valuation is because it allows you to index AI in more ways than just via GPU demand
https://x.com/umang/status/1970692831389065244?s=46
Great article, loved it. I think you diagnosed a huge part of my psychology here.
The "no gamble, no future" ethos is difficult to trace.
Various LLMs say it comes from Poker, notably one Ren (Tony) Lin who adopted it as his catchphrase, but I recall hearing this in M:tG circles as early as 2008-09; so it was infiltrating the zeitgeist even back then. While impossible to unproblematically pin this psychological mode to any given culture, it would not surprise me if there's some East Asian influence at work here.
Whether it comes from outside or entirely home-grown, the United States (and the West more broadly) is now thoroughly suffused in this kind of thinking. One could also point to Taleb and his popularization of taking into account the long tails in probability distributions.
This way of being is pretty cursed and sociologically unsustainable (we see signs of this everywhere).
Thanks, Rohit. There’s transcendent beauty in your article if you but look for it.
♥️