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BACK TO REALITY

As we all know, technology stocks (particularly those in the US) remained some of the largest beneficiaries of the incredible amount of monetary and fiscal stimulus poured into the economy over the last two years. With the pull forward in demand for everything from streaming services and online education, markets have been more than a bit exuberant for quite some time.
As market sentiment fluctuates between greed and fear, we now find ourselves on the opposite end of the spectrum. The potential of a heightened interest rate environment has challenged the prospects of many of the most notable market darlings with an extremely high percentage of Nasdaq companies trading at their 52 week lows.
While there were some companies that frankly never deserved the valuations that the market temporarily granted, it is refreshing that there are now portions of the market where we are again seeing compelling opportunities for the long-term.
Building a Life – Howard H. Stevenson
This is one of those videos everyone should watch once. Stevenson wrote his most impactful book following a near death experience which inspired some deep thinking on how to live a good life.
Who is the most successful person in the room? That depends entirely on what you measure.
Watch the video
The Focus to Say No
Whenever you say yes to committing your time, you are also saying no to something that could have taken the place of that activity. We believe that reframing your mentality to consider exactly what it is you are saying no to is incredibly helpful in managing time effectively.
The difference between average results and exceptional ones is what you avoid. Saying no to mediocre opportunities is easy. Saying no to good opportunities is hard.
We all have the same number of hours in a week. What separates people is how they use them.
You can do anything, but you can’t do everything.
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3Q 2021 GMO Quarterly Letter
We always hesitate in featuring GMO content as it tends to skew a bit towards extreme bearishness and market timing. However, many of the measurements they use are interesting and particularly relevant in the context of the recent market volatility (thus using the Q3 letter).
We believe that the last two years have conditioned investors to expect returns which are not consistent with long-term history. That doesn't mean that a proper investment program will not produce very attractive returns from this point forward, but that compounding at extremely high rates is not nearly as easy as recent history would suggest.
History suggests that valuations are generally mean-reverting over time, but valuations are a crucial driver of future expected returns for assets even if valuations do not mean revert.
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Are Venture Capital's Go-Go Years About to End?
Two articles in a row on valuation… we know and apologize.
Still, it feels worth sharing this piece right now. Venture investors have had no trouble finding exits in the public markets at impressive valuations in recent years, leading to a flood of capital being raised in the space and dramatically increased competition to invest in the best companies.
We continue to believe there are great returns to be found in the venture market, but are increasingly confident the dispersion between returns at the best funds and the rest of the market could be shockingly large.
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