i guess so. but what causes these persistently bubbly conditions?
the top 1-2% have very large cash hoards they absolutely must invest. and they can't just go around opening laundromats, liquor stores and flipping houses. that's chicken feed. it requires too much attention. too much work.
there are challenges investing in the really big global growth stories (e.g. China): state ownership has the upper hand. they can be forced into a loss position by the state.
yet, vanishingly few are smart enough to predict the rise of Facebook or Google. so what can they do? take shots in the dark in the US tech economy until they hit something large.
The upper echelons are awash in cash. The ratcheting down of taxes on corporations and profits, frees up that capital for investment. There is more capital than sane investments, at this point.
I don't understand the "it requires too much attention". Isn't that what managers are for ? Assuming your opportunities are profitable enough , just hire enough managers and be done with it?
Generally retail requires lots of efforts ( management must take care of really very little details ) and produces a very limited capital gains. You have a steady CF but you are always on the edge if you need to expand or innovate.
Who manages the managers and how do you trust them? How do you measure their value when it's possible to cook the books? A portfolio of managers seems less reliable to me than a portfolio of companies. At least in the latter case, you can all pretend that the other investors are doing the proper diligence.
It could also make sense if there's so much inefficiency in the job market (hiring, retention, etc.) that large companies can afford to make VCs whole just to lock in productive employees for a couple years.
the top 1-2% have very large cash hoards they absolutely must invest. and they can't just go around opening laundromats, liquor stores and flipping houses. that's chicken feed. it requires too much attention. too much work.
there are challenges investing in the really big global growth stories (e.g. China): state ownership has the upper hand. they can be forced into a loss position by the state.
yet, vanishingly few are smart enough to predict the rise of Facebook or Google. so what can they do? take shots in the dark in the US tech economy until they hit something large.