Hail! To The Victors
w.175 | Modeling VC Strategies, What Really Matters, Memorization, Reading
Dear Friends,
Happy Thanksgiving to you and your family. I’ve been home in Minneapolis for most of this week with my family.
I have so much to feel thankful for this year, including continuing the honor of writing for each of you every week. Thanks for the friendship, conversation, referrals to thought-provoking reading material, and for keeping me honest, always.
And, a big announcement for me coming next week…!
Today's Contents:
Good Reads: Sensible Investing & Trends
Song of the Week: Hail! To the Victors.
Good Reads: Sensible Investing
Pounding The Table On Meta by Brieme Capital. It certainly looks cheap…
Modeling VC Investment Strategies
TL/DR: Median performance significantly improves with increased diversification. Top-decile MOIC shows high values that initially decline and then rise with more diversification. These results make sense because a low number of portfolio companies will result in a large standard deviation of fund outcomes due to the concentration risk. Therefore the top decile performance is either fantastic or terrible.
What Really Matters: New Howard Mark memo. These are usually worth a read, but this one stands out as clearer, tighter, and more actionable than the average.
What does NOT matter?
Short-term events
Trading mentality (We’ve seen so much of this recently. Trading apps: is investing becoming far too much fun?)
Short-term performance
Volatility
Hyperactivity
What does matter?
This one is more complicated, but the headline is “performance of your holdings over the next five or ten years (or more) and how the value at the end of the period compares to the amount you invested and to your needs.”
Why Memorizing Stuff Can Be Good for You. You can only think critically about a topic if you have information stored in long-term memory. And similarly, How Knowledge Helps, notes that it speeds and strengthens reading comprehension, learning — and thinking.
This set of articles is in defense of memorization and the accumulation of facts. Sometimes, I hear people say things like, “I don’t need to remember; you can search the Internet for everything” or “It’s in my second brain,” but that misses the point that the benefits to you are much higher if you build knowledge within your memory. I mostly buy physical books to underline and write notes in the margin. It’s worth the investment to have higher efficacy of knowledge retention. Thanks to Michael Olaya for reminding me of this intentional behavior this week.
The Need to Read the latest essay by Paul Graham.
Secondary students don’t read books anymore. They (read: we) spend seven-plus hours on social media. The chart below shows the percentage of 12th graders who read a print book or magazine for pleasure almost every day from 1976-2016. Let’s assume the trend line continued downward for where we are in 2022. The study is here.
Selfie & Song of the Week
Hail! to the Victors
Music video here.
As a good Midwesterner, I spent four-plus hours today on the couch watching the Game - i.e., the Michigan v. Ohio State football (American!) game - with my family’s multi-generational crew of Michigan alums and one of my grandfather’s fraternity brothers. As you can imagine, it was rowdy.
Unlike many recent years, it was more stressful for all involved with a close game. Ultimately, Michigan came out on top despite expectations. So, as the anthem of the afternoon, it gets the song of the week.
Hail! to the Victors by Michigan Marching Band
Hail! to the Victors valiant
Hail! to the conquering heroes
Hail! Hail! To Michigan
The leaders and best...
Selfie of the week:
Thanks for reading, friends. Please always be in touch.
As always,
Katelyn