I can understand the allure. But in my experience there are two issues with this approach:
1) Most humans find satisfaction in continuing to build and work. That can certainly be a non-economic pursuit, but for many the two are related.
2) The half life of wealth is shorter than many estimate!
I wrote a bit about this…
BobCasey retweeted
Equity trading is just 17% of Robinhood's revenues. Options, crypto, event contracts, and fees are 83%. Their margins when clients buy and hold equities are virtually zero. Margins when clients gamble are large. It's a fundamental misalignment with customers' long-term interests.
BobCasey retweeted
A startup doesn't have to be your life's work, but if it is, you become much harder to defeat. You play the long game and you outlast everyone. Because practically everyone else is an opportunist by comparison.
BobCasey retweeted
Tomorrow.
"Do not allow the tyranny of compounding costs to overwhelm the magic of compounding returns."
-Jack Bogle
In November of 2020, @TegusHQ ran its first paid ads - as presenting sponsor of @InvestLikeBest with @patrick_oshag.
Tegus co-founder Mike Elnick cut a deal with Patrick where we initially paid $20k per month ($5k per episode). We'd been growing at at a steady clip, and thought ILTB would help us get in front of more of our target customers.
That was a good bet. In November of 2020 we added ~$600k in net new ARR. In December we added $1m+. We attributed that to typical end-of-year software buying habits, even though it felt like half of our new inbound clients were telling us that they heard about us via the podcast.
The sales kept ramping. Fast forward to February of 2021, and we had our first month of $2m in net new ARR. A few months later and we had our first $3m month. ILTB turned out to be an incredible channel.
Patrick had a captive audience that perfectly overlapped with our target customers at Tegus. It was the ideal advertising channel for our product.
Given our high average contract values and our strong conversion rates, we could have paid far, far more than we did initially to advertise on ILTB. In time, Patrick realized that - and we did too. Pricing increased dramatically - by 5x, then 10x, then 20x+ what we initially paid - yet we were very happy to pay it.
@djrosent and @gilbert create incredible content. I absolutely love @AcquiredFM, and I know so many founders, CEOs and investors who feel the same way. It's unsurprising to me that they're able to command these rates. So awesome to see their success.
everyone talks about TBPN making 20M in ads, but no one talks about how @AcquiredFM is pricing their midroll at 4.7M (goddamn)
BobCasey retweeted
Really enjoyable read.
I had a chance to meet Bob and Tom in ‘23 when I was invited to Chicago HQ to give a seminar on “what’s investors do all day”
Conceptually, expert network transcripts are a relatively simple business that may cause one to think “I could do that too”, but it was super apparent to me that day how locked in they were on the customer problem and how impressive of an execution machine they built to achieve that vision. Insanely nice people too.
The Tegus team deserves all the success they achieved.
This dynamic holds in public markets just as it does in venture! Research by Hendrik Bessembinder @ASU shows that most U.S. stocks have generated lifetime returns lower than one-month T-bills. Roughly 4% of companies account for the entire net gain of the U.S. stock market since 1926, and an even smaller group (the “Mag Seven” type names) driving a disproportionate share of those returns.
This is an insightful blog post. People who don’t understand will inevitably gravitate toward playing venture lotto (venturelotto.com).
“The Power Law is what happens to your portfolio if you select for resilience, non-obviousness, and uncapped potential. It is the destination, not the map.”
Yes.
I want to know how Buffett consumes his morning media diet in painstaking detail. I want to see how Zuck runs a 1:1 with Susan Li or Andrew Bosworth. I want to understand how Anna Wintour plans a weeknight dinner party.
xitter.cf/WillManidis/status/198…
BobCasey retweeted
So Constellation will sell power from its Clinton IL nuclear plant to Meta starting in ‘27, who is also considering building more gigawatt scale nuclear plants for its AI power needs. Time to lift our moratorium on large nuclear construction. Now!
It’s been clear the last few years that tech firms, not residents, would be the primary payers footing any nuclear construction bill.
Further, what will happen when this power output is no longer available to rest of state area it services? We will need new power to replace it. Sorry, but solar + storage isn’t replacing 1 GW of power here anytime soon… And we essentially have a new coal and gas ban in place. Maybe the power will come magically.
Nuclear is good for the environment and our economy. Given we have interested and extremely well capitalized financiers for new plants, there couldn’t be an easier slam dunk case to allow the construction of large scale nuclear to resume here.
BobCasey retweeted
Affordable housing is anything but affordable! When you have units costing almost $1 million, with almost 100% of the financing coming from government, it’s time to rethink “affordable housing”
I think about this tweet a lot.
@moizali did a great takedown of wealth management.
Conflicts of interest & principal/agent problems abound. Firms push their own products. Layers of fees on fees. Advisors focus on new assets, not serving clients. And PE is rolling it all up.
I've worked with 3 different private wealth managers over the past 5 years, including @GoldmanSachs.
To date, I can say that:
A. They have provided virtually no value in growing my net worth.
They promise access to exclusive investment opportunities, but the investments aren't nearly as good or as exclusive as you'd think.
Elliott Management has $71 Billion under management. How exclusive do you think it is? Every wealth manager pitched me "exclusive access" to Elliott. It's the fucking Vanguard of private wealth managers. Forerunner Ventures? They raised $1 billion dollars. Nothing you couldn't get access to if you really wanted/tried.
But to funds you can't get access to, they can't either. Sequoia? Not a chance in hell.
B. They are structured against success.
You know what I want to invest in? The small scrappy guy who bought two properties in SoCal or Idaho or Oklahoma and learned how to work with contractors and flipped them. Now, he wants to buy 10 or a small apartment building and do the same.
But Private Wealth Managers are all focused on acquiring and retaining large, rich clients. Why? Because their compensation is based on a percentage of money you have with them. If you have $10M invested with them, they make less than if you have $100M. So they want big fish.
As a result, they can't invest in a guy raising $10M to buy real estate in Coral Gables Florida, because he's too small for them. They can only invest in the Elliots of the word.
C. The idea that they are going to set you up with unique advisors who will be helpful is malarkey.
The people they set you up with are run of the mill attorneys or accountants. They aren't creative. They aren't thoughtful. They aren't amazing. If they were, they'd hang up with their own shingle and make a ton of money. You think the best tax attorney works at Goldman Sachs where he makes $1m a year? He can start his own firm and make 10X that.
D. They aren't smarter than you.
The Private Wealth Manager I work with today forecasted a soft landing with no meaningful interest rate raises 2.5 years ago. They suggested I invest ~$10M in medium term bonds because there was 3% yield to be had and they didn't think interest rates would go up. I remember sitting in that conference room listening to them and thinking "are you fucking incompetent or insane"
I invested in one fund with Colony Capital that was focused on real estate during the pandemic. It LOST money. One of the few funds to break the buck during the pandemic in real estate. And it wasn't focused on office real estate, so don't even say that.
Private Wealth Manager's Ph.Ds will say "discounted cash flows" and "regression analysis" to make your head spin, and then jerk off in the dark with your money.
E. The worst is Goldman Sachs though. I mean they are the fucking worst. Rather than invest in Elliott, they say "we have our own Elliott where we do the same thing but better". That may be true, but they'd say that no matter what you suggested. If @BillGates agreed to pay me a billion dollars tomorrow if I loaned him $1 today, Goldman would advise against it. Goldman would say "don't lend him the dollar - give it to us to invest instead" because then they'd earn fees on that dollar.
A. If you're a PWM, tell me why I'm wrong. How are you different than other managers? Why are you better?
B. Are you a client and have had a better experience with Private Wealth Managers than me? If so, please explain why?
C. If you're thinking about using a PWM, I'd suggest just investing in the S&P500. What do you think?
BobCasey retweeted
Aldermanic prerogative is terrible for Chicago. I wrote about we can incrementally reform it over at @acitythatworks 1/n
BobCasey retweeted
you can waste your entire life overthinking it: the window will slam shut, they will move on, your coffee will get cold, and you get tired and old. just act decisively, stop thinking so much.
Tonight's firing of Pedro Martinez is the most flagrant exercise of regulatory capture I've ever seen.
The @ChiPubSchools Board has shown a reckless disregard for their duty to act in the best interests of the children and residents of the City of Chicago.