Stairway to Heaven
w.183 | Pandemic Trades, Front-Running the Institutions, Learning Math in VR
Dear Friends,
We have a short edition this go around as it’s been a busy week between meetings and travel, but I hope to be back with more original writing in the week to come.
Today's Contents:
Good Reads: Sensible Investing
Trends: Virtual Reality
Song of the Week: Stairway to Heaven
Good Reads: Sensible Investing
Bireme Capital Investing through the Pandemic. Bireme Capital had a fantastic 2022. Wow. I reached out to them and chatted with their CIO in March 2021. They are an emerging manager, and I just didn’t pull the trigger. Mistake. Past performance doesn’t predict the future, but they did call the previous two years perfectly.
The Great Front-Run. This is an analysis of endowments and pension funds showing the trend that we all know - the large and growing allocation to private equity and venture capital. Interesting perspective: “Everybody is trying to be David Swensen. So likely the future returns will be awful.”
To perform in the next ten years you need to sell what worked (Tech, PE, VC, Growth) and buy what didn’t (International, EM, Commodities, Gold, Value).
The good thing is if this switch to international and EM public equities is correct, the trade will work for years. It will take the mega funds over-allocated to private equity years to get out of their positions and years for the board of directors to think about changing the allocation targets. So after 5 years of EM and International outperforming, there will still be another 5 years of outperformance still to go as Yale and Stanford have finally disposed of their money losing fintechs and are ready to buy European banks at 10x earnings (up from 6x today). Effectively, you can front run the endowments for years.
Permanent Equity 2022 Annual Letter: Fifteen years in the trenches of SMB acquisitions and operations.
Trends:
A Grab Bag
The Brand Year Book 2022 - An analysis of GenZ marketing positioning of the big brands. I hadn’t even heard of a few of these brands!
Interesting data source and not surprised by this chart. Read the footnotes though. Seems like the triple peak might not be really real or rising.
VR in Education & Training
ChatGPT And AI Will Fuel New EdTech Boom (hyperlink outside paywall). I contributed to an article in Forbes this week about founders building the future of edtech with new technologies. As the good VC I am, I promoted the investment thesis and founders we’ve invested behind.
One of those is Prisms of Reality, which launched four middle school math modules to the Meta Quest store this week. If you have an Oculus and a middle/high schooler and want to try it out, let me know and I’ll get you a code for writing a review.
Selfie and Song of the Week: Stairway to Heaven
Here on YouTube.
The classic of classics. I prefer most acoustic versions, but the lyrics are good too. Enjoy!
“Stairway to Heaven” by Led Zepplin
And it's whispered that soon if we all call the tune
Then the piper will lead us to reason
And a new day will dawn for those who stand long
And the forests will echo with laughter
Selfie of the week
Thanks for reading, friends. Please always be in touch.
As always,
Katelyn