The thing I try to remind myself is that if you think about what's happened in the last 100 years — where people live, the nature of work, what life expectancy is — all of the things that we would have said to be true in 1925 would be wrong. And I think we will see more change in the next 10 years than we saw in the previous 100.
The most counterintuitive thing I've learned is that the more you optimize for growth, the more you actually undermine the conditions that create it. The companies that grow the fastest over long periods of time are usually the ones that were willing to grow more slowly at some earlier point to build something real.
The beauty of permanent capital is that you can say no to a lot of things. You don't have a fundraising cycle, you don't have to worry about returning capital to LPs, you can take a very long view. And that long view is actually a massive competitive advantage because most of the investment world is driven by relatively short-term incentives.
The best businesses we've found are ones where the value of the business actually increases the longer you hold it, not just because of retained earnings, but because the competitive position strengthens over time. That's the opposite of what most people think about when they think about an investment decaying or having a terminal value that you have to discount back.
The best businesses in the world are ones where the reinvestment rate is high and the return on incremental capital is also high. Those are very, very rare. And when you find them, the right thing to do is to do nothing, which is actually very hard to do as an investor because you're paid to do things.
The key insight is that permanent capital changes your relationship with time. You're not managing to a fund life; you're managing to the life of the business. That means you can make decisions that are bad for the next quarter, bad for the next year, but right for the next decade.
While countries like Australia, Singapore, the UK and the US have long term coordinated manufacturing and industry four point zero strategies, New Zealand has shelved its industry transformation plans and still doesn't have a clear view of what kind of manufacturing base it wants in ten to twenty years.
maintenance, the quiet act of keeping things going, turns out to be the hidden force behind success and failure in nearly every domain of human endeavor.
maintenance, the quiet act of keeping things going, turns out to be the hidden force behind success and failure in nearly every domain of human endeavor
I left private equity because my view was has to have, you know, a very long term approach, and I had suffered a personal tragedy in my life which made me reexamine what I wanted to do, and I decided that I wanted to try and build a school group.
An eight-year-old today doesn't need a driver's license when they're 16. And I think, going back to your point, it's easy to get in these modes where geopolitical white knuckle moment. But if you look, I think ultimately Tesla autonomous is worth a trillion dollars going to a Tesla story.
your 20s sort of dictate your trajectory into your 30s and 40s, and your ability to kind of get to the right positions in your 30s and 40s to really then aggregate influence and economic security are somewhat a function of the trajectory or the scale or the velocity you establish in your 20s.
4mo ago
Underscored — save the words that stop you in your tracks.
