The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 4,765 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Regulatory Startups Are Disadvantaged Unless They Helped Write the Law
“If you're harnessing a regulatory inflection, I hope you were involved in helping that law get written, because very few laws get passed just out of the goodness of people's heart. Usually there's a set of people who are lobbying for those laws. Usually they h…”
Maples: Startups Without Inflections Cannot Build Radically Transformative Businesses
“Either it embodies an inflection. You just haven't thought about it enough, or it doesn't embody an inflection, which probably means you're solving present pain for present customers for present unmet needs. And you might build a reasonable business doing that…”
Breakthrough Early Adopters Buy for Aesthetic Reasons Rather Than Practical Ones
“They believed in an aesthetically different superior future, and that's why early customers move. They move for aesthetic reasons rather than practical reasons. The same reason that people buy art. They buy into the aesthetic vision of the artist.”
Seed Investing Is the Exact Opposite of Buffett's Margin of Safety
“It's like Buffett and Munger talk about your margin of safety when you buy a stock. It was the intrinsic value of the stock higher than the price of the stock. My business is the opposite. My business is margin of asymmetric upside if it works.”
The AI Sector Has Tons of Technological Inflections but Lacks Insights
“So I would say that AI is characterized by tons of massive inflections and not enough insights.”
Targeting zero defaults means credit managers are leaving yield on the table
“If we did not have any defaults in our portfolio and we have that yield advantage, then we're not pushing the yield advantage as much as we should, because we should push it to, we have a couple defaults still in line with the market or less, but if we have no…”
Credit is simpler than equities because returns don't require market agreement
“I think it's harder for the equity investors because they identify a stock and they make that purchase and then they hope the next day or shortly thereafter, the rest of the market agrees with their investment thesis and buys that stock. So that trades up. If …”
Simkin: Unlimited upside asymmetry won't stop venture capitalists from going broke
“But that does not mean because of the asymmetries that venture capital is a winning business because you've got this unlimited upside, or that insurance is a losing business because you've got this unlimited downside. Ultimately, what it comes down to is appro…”
Simkin: Black-Scholes wrongly assumes stock distributions are right-skewed, not left-skewed
“The Black-Scholes model, which is literally Nobel Prize winning math, this is amazing stuff, has assumptions built into it that we know are just wrong. Among the assumptions that are built in is a normal distribution of stock returns, which would lead to a log…”
Connaughton: Founder-dominated private equity firms generally fail after one generation
“Founder-oriented models, generally the ones that didn't survive more than A generation.”
Hunt: The Ability To Sell Stories Defines Successful CEOs Today
“This is narrative creation. This is what makes for a successful CEO today, Ted, is the ability to create and sell a story.”
Alpine generated 95% of returns by scaling bright spots, not fixing problems
“You actually make all your money by focusing on the bright spots and scaling the things that are going right. We've made 95% of our money by focusing on the things that are going well and scaling those until those crowd out the rest of the activities.”
PE buyers get a discount acquiring companies without incumbent management
“In the public markets, Ted, you pay a premium to put your own management teams in. In the private market, you get a discount.”
Traditional executive search reshuffles rather than expands the diversity candidate pool
“They go look at people that have run healthcare software companies for 20 years, and so the DE&I battle was won or lost 20 years ago. Now, you could tell them, okay, we want that to be a minority or a woman, but they're not increasing the pool, they're just mo…”
Haghbin: Semi-liquid private fund structures cannot harvest the full illiquidity premium
“To harvest the illiquidity premium, you have to take on the illiquidity risk. There is no free lunch. So these products, I think, are great. They will give you substantially similar exposures, but that liquidity profile is going to lead to slightly different p…”
Financial Models Do Not Create Alpha; Identifying the Core Driver Does
“You're not going to outmodel the other guy. We're going to build models. Figure out the one driver that will dictate success or failure to your thesis, and then spend all your time on that one thing.”
Asness: Private equity volatility is higher than public markets despite reported metrics
“Where private equity is well to the left of public equity, and it's concentrated off in levered equity. So if that's vol on the x-axis, it is not to the left.”
Behring: Most 3G Value Creation Came From Growth, Not Zero-Based Budgeting
“In spite of all the publicity the zero-based budget gets, the portion of that value creation that is directly associated with the efficiencies and therefore with the zero-based budget is small. I mean, frankly, the majority of that growth came from, again, the…”
Dixon: Centralized platforms inevitably shift from attracting creators to extracting value
“These networks have a set of shifting incentives where when they start off, They're solicitous to software developers, creators. They have to be their startup. But over time, as they gain power and the network effects kick in, they start to extract.”
Dixon: US crypto policy perversely protects useless tokens over useful products
“So there's this really reverse thing I think happening now where people are afraid to build useful products, but it's perfectly legal to build useless products.”
Dawn: NAV loans used for LP distributions are unpopular and overpriced
“NAV loans that are raised against a portfolio to send capital back to LPs, very unpopular. Very high priced. Many LPs don't like them. They can raise capital cheaper themselves. So those are not popular.”
Liu: Legal documents do not protect limited partners when investments fail
“We spent a lot of time really thinking about how a manager would treat you when things went wrong, because the documents don't protect you. Ellen talked a lot about that. We have to know that they'll make the right decision when something goes wrong.”
Milken: There is fundamentally no difference between private and public credit
“Many people try to separate this, but to me, there's no difference between private credit, public credit, term loans, etc.”
Milken: Nobody Generates High Long-Term Returns by Guessing Interest Rates
“Second, I really have never met a person over a long period of time who's generated a high rate of return by guessing where interest rates are going. So yes, you're right once. Yes, you're right twice, but not in the long run.”
Mauboussin: Public equity returns exhibit the same power law as venture capital
“We associate power laws with venture, but if you let it play out in public markets, it's also the exact same power law. It's a power of compounding is the key insight.”
Mauboussin: Mega-Cap Economics Have Defied Classical Theory Since 2000
“Since 2000, roughly speaking, it feels like the economics of the biggest companies have been almost economic law defying by that. I mean, two things. One is they've grown faster than what we would expect big companies to do. And they've sustained very high ret…”
Mauboussin: Companies Ignore Cost of Capital and Rely on a 15% Hurdle Rate
“So it turns out it's really interesting that companies, they calculate their cost of capital. They know it, but they don't use it. For almost everything they do, they use a hurdle rate, and that hurdle rate's roughly 15%. So whether the cost of capital goes to…”
Jacobs: Aligning with macro trends matters more than operational execution
“You can mess up a lot of stuff, and if you have the main trend right, you can make money. And conversely, You can do a thousand things right, and if the big trend is smacking you in the face, it's not going to work.”
Jacobs executes large acquisitions in pairs to avoid multiple organizational restructurings
“I typically do large deals in pairs. Not always. I'd like to do two large deals near each other and then stop and digest and integrate. The reason I do that is I don't want to have to do two organizational charts.”
Learning the right lesson at the wrong time compounds investment underperformance
“Actually the worst possible outcome, in my view, is learning the right lesson at the wrong time. At least in the medium term, you'll end up compounding the mistake you just made and drag out a hundred performance for many years.”
Arndt: Static 'Set and Forget' Portfolio Allocation Is Dead
“And so really, in saying the death of traditional portfolio construction, and my team made me put a question mark on the end of the title, because we're really calling for a debate, but I guess I personally think it is. What we're really saying is there might …”
Arndt: Diversification Requires Granular Scenario Modeling, Not Asset-Class Labels
“I don't use the word diversification because we don't assume asset classes behave differently in a particular way. We try to look through that in a more granular way to say, well, these subsets, let's say, of real estate in these geographies will behave this w…”
A 90x P/E stock compounding at 45% remains an attractive investment
“If it's a 90 times PE company that's growing earnings only 10%, it's really hard to make the math work long term. But if it's a company that can compound earnings at 45% over the next five years, that can actually be very, very attractive. In an expected retur…”
Marshall: Public markets drive most institutional returns for the first seven years
“I would say at the early stages, having really strong public equity and hedge fund, Expertise is really important because that's where most of the assets are going to live. You can dream about getting into venture funds and buyout funds and all of that, but mo…”
Marshall: Volatility is the only observable risk; others resist vector math
“The only risk that can be observed is volatility, but I'm managing seven other ones, and we've tried to do it with vector math. You can't.”
Housel: Excessive VC Capital Broke Good Businesses by Forcing Unnatural Growth
“There were so many businesses in the last decade that were good businesses with a good product that customers loved. And let's say their natural growth rate was 50% per year. Just throwing that out there. But a lot of VCs are like, oh, we're going to give you …”
Housel: Financial Pundits Escape Penalty for Being Wrong by Soothing Clients
“If you are a pundit in the financial industry or an analyst or an economist, whatever word you want to use, If you tell people what they want to hear, you can be wrong for a long time without any penalty, because what you are doing, you're giving your clients …”
Haugaard: Markets Overprice Improving Sovereigns by One to Two Rating Notches
“At the end of a positive rating story, we almost always found that the market is pricing one to two notches too much of a good story. So when credit risk is actually not going down anymore, there's a tendency for investors to stick with a good story for a litt…”
Tangen: Mega-funds must track indices because governance cannot survive big relative losses
“The problem is that you are being kicked out at the worst possible time, and typically then you would liquidate the positions and crystallize losses which shouldn't be crystallized. And that is why it's important to be close to index, because a governance stru…”
Levy: Real estate value stems from operational development, not financial engineering
“These are the people who create the value. The people who build the buildings, the people who operate the buildings. Don't get me wrong. You need to be a smart investor, and you need to have the right capital structure and the right alignment, and those are al…”
David Swensen accepted illiquidity only as a necessity for equity diversification
“If you want to diversify your equity exposure away from the US equity market, by definition, everything else you do in the world is less liquid. You have to embrace some level of illiquidity in order to get the diversification. In the book, he described illiqu…”
Mercer's Sebusch: Short 2-to-5-year carry vesting destroys venture fund alignment
“I've seen An explosion of short vesting schedules of two to four to five years, and it's just not great alignment. I don't want a GP to be able to leave after two years, get a hundred percent of their carry, sit on the beach, and now the team or the LP base ha…”
NAV Loans Destroy Private Equity's Cross-Collateralization Protections
“A portfolio of options is more valuable than an option on a portfolio. One of the attractive features of private equity is the absence of cross-collateralization of debt across portfolio companies. Nav loans take away that benefit.”
Starting an independent hedge fund makes no sense 99% of the time
“It's a way to attract people who are very entrepreneurial and who are real business builders, whereas 20 years ago they probably would have just started their own fund, but now the industry has evolved to where there's so many impediments to doing that and so …”
Muthiah: Biotech venture platform models are capital inefficient for private investors
“The reason for that is when we look at venture in life sciences, and there's a broad statement, this is not, doesn't cover everybody, but the strategy seems to be to invest in a platform that has multi-molecule outcomes. And in that construct, dollar that goes…”
Seides: Nearly every aspect of fund management suffers from principal-agent conflicts
“Nearly every aspect of fund management suffers from decisions made in the self-interest of the agents at the expense of the best interest of the principals.”
Allocators must scrutinize alpha because it is likely unrecognized factor beta
“You should pay huge attention to any source of alpha. It's probably beta.”
Fixed volatility budgets force endowment managers to sell low and buy high
“A lot of people out there in our business think about the average endowment portfolio should have 10% standard deviation around its annual returns, 10% volatility budget, which makes no sense, because what happens when markets go down, volatility goes up, all …”