Plenty of Venture Capitalist underform the market. Saying that everyone of them beats the market is not based on real data.
I didn’t say every Venture Capitalist beats the market. Venture Capital in particular seems like a hobby for people who are already rich. I said every founder of a $1B startup beat the market.
I propose the following bet: take any founder of a $1B startup that you please, strip them of all of their wealth, give them $1M cash. What percent of them do you think would see their net-worth grow by more than the S&P 500 over the next 10 years? If the EMH is true, the answer should be 50%. Would you really be willing to bet 50% of them will under preform the market?
Venture Capital in particular seems like a hobby for people who are already rich. I said every founder of a $1B startup beat the market.
There’s a lot of survivership bias in that claim.
What percent of them do you think would see their net-worth grow by more than the S&P 500 over the next 10 years? If the EMH is true, the answer should be 50%.
No, you would only assume that if you bill the capacity of that founder to work at zero. Successful founders have skill at managing companies that distinct from having access to private information.
No, you would only assume that if you bill the capacity of that founder to work at zero. Successful founders have skill at managing companies that distinct from having access to private information.
Care to elucidate the difference between “skilled at managing companies” and “skilled at investing”. Do you really claim that if I restricted the same set of people to buying/selling publicly tradable assets they would underperform the S&P 500?
Care to elucidate the difference between “skilled at managing companies” and “skilled at investing”.
Tennis is not about tapping private information. Management is not about tapping private information.
Do you really claim that if I restricted the same set of people to buying/selling publicly tradable assets they would underperform the S&P 500?
The set of people buying/selling publicly tradable assets is the set of money managers at mutual funds. Those do underperform the S&P 500.
Additionally, the EDH says that all inefficiencies that can be profitably exploited disappear. If I can hire an analysts for 100k that allows me to find an efficiency that makes me 100k I’m not outperforming the S&P 500. The EDH assumes that the price you have to pay to uncover marginal inefficencies is equal to the profits that you can make from the inefficency.
The most skilled analysts likely do get employed by funds, the funds still overall underperform.
I’m still curious if you would be willing to bet against a fund run exclusively by founders of the S&P500Those do underperform the S&P 500.
Oh yeah, I definitely agree that mutual funds are terrible. Pretty sure they’re optimizing for management fees, though, not to actually outperform the market.
I’m still curious if you would be willing to bet against a fund run exclusively by founders vs the S&P 500. Saying the management fee for such a fund would be ridiculously high seems like a reasonable objection though.
For that matter, would you be willing to bet against SpaceX vs the S&P 500?
I didn’t say every Venture Capitalist beats the market. Venture Capital in particular seems like a hobby for people who are already rich. I said every founder of a $1B startup beat the market.
I propose the following bet: take any founder of a $1B startup that you please, strip them of all of their wealth, give them $1M cash. What percent of them do you think would see their net-worth grow by more than the S&P 500 over the next 10 years? If the EMH is true, the answer should be 50%. Would you really be willing to bet 50% of them will under preform the market?
There’s a lot of survivership bias in that claim.
No, you would only assume that if you bill the capacity of that founder to work at zero. Successful founders have skill at managing companies that distinct from having access to private information.
Care to elucidate the difference between “skilled at managing companies” and “skilled at investing”. Do you really claim that if I restricted the same set of people to buying/selling publicly tradable assets they would underperform the S&P 500?
Tennis is not about tapping private information. Management is not about tapping private information.
The set of people buying/selling publicly tradable assets is the set of money managers at mutual funds. Those do underperform the S&P 500.
Additionally, the EDH says that all inefficiencies that can be profitably exploited disappear. If I can hire an analysts for 100k that allows me to find an efficiency that makes me 100k I’m not outperforming the S&P 500. The EDH assumes that the price you have to pay to uncover marginal inefficencies is equal to the profits that you can make from the inefficency.
The most skilled analysts likely do get employed by funds, the funds still overall underperform.
Oh yeah, I definitely agree that mutual funds are terrible. Pretty sure they’re optimizing for management fees, though, not to actually outperform the market.
I’m still curious if you would be willing to bet against a fund run exclusively by founders vs the S&P 500. Saying the management fee for such a fund would be ridiculously high seems like a reasonable objection though.
For that matter, would you be willing to bet against SpaceX vs the S&P 500?