From 600+ conversations with the world’s leading thinkers.
Systems change is slow because it requires consensus that there is a system failure to start with, as well as the presence of a viable alternative. This requires a combination of culture shift, behavioral change, and structural change to ultimately change the rules of the game.
It might feel—if you haven't yet learned the rules of these hidden markets—that the outcomes are based on luck, chance, or things beyond your control, but you actually have a lot more agency in them than you think.
What really is risky?! In many ways I think it's actually much safer to take things into your own hands rather than trusting your destiny to an uncertain jobs market.
GDP only catches a slice of the value that we value. It captures what goes on in the market, the financial value of goods and services sold in an economy over a year. In the boxing match between free market laissez-faire capitalists and state loving socialists the economic debate ignored the household – which is expected to provide the food, do the cooking, washing, cleaning, sweeping, education, look after the sick and elderly, yet is completely missing from GDP.
These new regulations should (in theory, although there is no research to test it) prevent this psychological risk aversion by ensuring that all counterparties know that at a wholesale and institutional level, they are safe.
Warren Buffett had a phrase I really liked: You want to give your kids enough to do anything but not enough to do nothing. I set up a plan to create wealth for them—and I wildly overshot that.
The notion of 'alternative' as an asset class sits badly with me because for me, saying hedge-funds – as an example – are an asset class is akin to comparing mutual-funds to being an asset class. The sheer diversity within these groups makes it difficult to define them as a class in their own right, given the complete lack of commonalities across the board.
By far the most common is underestimating expenses. When industries do barely double-digits if their lucky, business plans ought not to be showing EBIT or EBITDA of 50-70% – that doesn't mean people are smart, it means they haven't understood the industry.
The easiest piece of advice to give, but the hardest to follow- is to not let yourself get swept up in the next bubble. You could have said that about tech stocks in the 90's, housing prices around the world in the early 2000's… but people always got swept up in them. The history of financial bubbles does not give cause for optimism.
Inequality is strong because wealth goes to wealth. The economic and political organisations of the world are such that the negotiation power of the poor is minimal if not zero. There are no trade-unions, no capacity to negotiate… even in the US, Europe and elsewhere… the level of concentration of wealth is bigger than ever.
We will not employ capital unless we can find an opportunity that has a minimum of 50% upside to our intrinsic value over the term of our investment.
Money allows you to deal with anonymous other people, not just your kin. There are things we do in families that we would find objectionable if they were transactions.