To be, rather than to seem.
“In the short run, the market is a voting machine, but in the long run it is a weighing machine.” —Benjamin Graham
Esse quam videri is Latin for “To be, rather than to seem.” It’s also the state motto of North Carolina, the home base of this newsletter.
Bull markets and easy money tend to create people—investors, CEOs, and investment managers—that want to seem like they are more than they are. Great returns are ascribed to great skill. Each new startup is going to be the next great company. Each new venture capital fund knows how to find those companies.
But booms eventually lead to busts. And as we wrote earlier this year, trees don’t grow to the sky. We’ve seen some pain in the public markets this year, and several crypto-related companies that claimed to be the companies of the future turn out to be worthless.
But we’ve yet to see a whole lot of pain among venture capital and private equity firms. Seemingly, given the money that has flowed into those spaces over the last few years, there may be some significant write-downs coming soon as well?
With investor funds often locked up for several years and some flexibility in how holdings are valued, maybe major pain can be delayed for a while. But eventually, the weighing machine will have its day, and the importance of being profitable and valuable will return to the private markets as well.
“What you would seem to be, be really.” —Benjamin Franklin
“There is a master key to success with which no man can fail. Its name is simplicity. Simplicity, I mean, in the sense of reducing to the simplest possible terms every problem that besets us. Whenever I have met a business proposition which, after taking thought, I could not reduce to simplicity, I have left it alone.” —Henri Deterding
Chart of the Week
H/T Charlie Bilello
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Making Sense Podcast: #287 — Why Wealth Matters [with Morgan Housel]
The Business Brew Podcast: Vitaliy Katsenelson - Soul In The Game
Business Breakdowns Podcast: Dino Polska: Serving Small-Town Poland [Premium Members of this newsletter can also watch a replay of Alex Bossert’s presentation at our Lunch at the Club event in April of 2021, in which he presented his timely thesis on Dino Polska.]
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