Can You Replicate VC in Public Markets???

September 11, 2022

“Just about every time you go against panic, you will be right if you can stick it out.”

– Jim Rogers

RESEARCH

GMO addressing sequence risk and a better way for investors to mitigate its effects.

Cliff Asness dispelling the idea that low interest rates justify the value vs. growth spread, or that interest rates drive the value trade.

Sparkline Capital on investing in innovation and replicating venture with liquid public equities. They state the true source of venture capital returns is innovation, which also occurs in both large and small cap stocks.  Considering this, investors can extend their “innovation allocation” from venture capital into public equities.

A shocking statistic: Of the 1,495 US venture deals in the first half of the year, only 4.9% have been down rounds – a historical low!

Source: Sparkline. The example investments provided are for illustrative purposes only.

How One Team Hacked the Efficient Frontier to Defang the Bear Market 

With alpha opportunities more elusive than ever, I’m looking at real assets. Why real assets? They’ve typically done well in high-inflation periods, and can help diversify traditional portfolios.

Right now, one real asset in my portfolio that I’m bullish about is blue-chip art. It might sound unusual, but unusual is one way to help beat a bear market.

For most people, art’s financial barriers have been far too high. But through securitization, Masterworks makes it easy to invest in multi-million dollar paintings by names like Picasso and Warhol.

No wonder 492,000 users have signed up to access their investment offerings. Most typically sell out quickly, so there’s a waitlist. But you can skip the waitlist with my unique link.

.See important Regulation A disclosures at masterworks.io/cd

BONUS CONTENT

 Vaclav Smil on why rapid decarbonization is a fantasy. Link

Fossil fuels now supply about 83% of the world’s commercial energy, compared to 86% in the year 2000…What are the chances that after going from 86% to 83% during the first two decades of the 21st century the world will go from 83% to zero during the next two decades? Especially as a few weeks ago China announced additional 300 million tons of new coal production for 2022, and India additional 400 million tons by the end of 2023. We are still running into fossil fuels, not away from them.

 Cliff Asness talks markets, factors, and why if being a great investor was easy, everyone would be one (43 minutes). Link

“There is a right side. It makes life excruciating because you have to stick with it, but that’s why the premium exists. If it wasn’t so hard everyone would do it and it would go away. That’s how I get through an evening occasionally. I tell myself that.”

 Great interview with Dan Niles, manager of the Satori Fund. Link

 Drew Dickson on why he agrees with the AQR piece above, stating that the move in growth stocks from 2017-2020 was not caused by lower interest rates. Link

 Another great read on share buybacks and why they can be a powerful capital allocation tool that enhances shareholder returns. Link

 Jeff Gundlach on interest rates, inflation, and expectations for the Fed. Link

PODCASTS

Toroso Investments’ CIO Michael Venuto shares lessons learned from working on the NYSE, trading Royal Caribbean options in 2009, and why he’s focused on the blockchain since 2016.

From The Episode:“Being a stock broker for two years taught me what it means not to be a fiduciary.”

Executive coach Marshall Goldsmith gives a masterclass on leadership, covering where leaders go wrong, common traits among the best leaders, and how to encourage behavior change in others.

From The Episode:“Never make your value as a human being conditioned on the results of what you’re trying to achieve. Never do that.”

David Senra – Passion & Pain[8/30/22 – 82 minutes]Apple | Spotify | Google

Senra is the creator of the Founders podcast, where he shares stories lessons from studying the great entrepreneurs. He shares the common themes he’s come across and the role passion and obsession have played in their success.

From The Episode:“If you think about how the decisions you’re making will affect people that aren’t even born yet, you’ll make your decisions differently.”

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