when the music stops

As the market's understanding of software companies has matured, increasing numbers of investors have capitulated to higher and higher prices. Tech companies are still at relative highs compared to historical average multiples before 2021. Modern software businesses can be better businesses than most investors realize. You can make a lot less money... See more

There are losses for hedge fund investors with large public portfolios at high-cost bases. An early-stage company whose public holdings fall 25% in value feels less pressure than a crossover firm when its portfolio falls from an 8X multiple-of-money to a 6X multiple-of-money. Public securities of such firms are underwater, and private holdings are ... See more

Year-to-date, the NASDAQ is down 15% and has fallen more since November's all-time highs. Declining asset prices put structural pressure on overextended investors through margin calls and redemptions. More investors begin to question their positions as asset prices fall. Growth stage companies are significantly less valuable when the risk-free inte... See more

Investing in companies at times of uncertainty can be an opportunity for investors. Silver Lake's early investment in AirBnB during a time of "distress" was a stroke of genius. Being willing to "be greedy" and take chances can generate outsized returns. It is likely that the best companies during this period will become leaner, more long-term orien... See more