4 ms·
The final advice is "invest in tech stuff, because there's a lot of opportunities in the old big companies". That's true, but there's some stuff in between abou
by rtpg 10y ago
The final advice is "invest in tech stuff, because there's a lot of opportunities in the old big companies". That's true, but there's some stuff in between about the old big companies being doomed (as in Oil companies going bankrupt). I don't really agree with that reasoning.
The thing I don't quite know is how the tech culture is going to generate a replacement to Johnson&Johnson in the next 20 years.
Unilever bought dollar shave club, right? So that's good for investors. But if all the big companies buy the successful unicorns.... didn't the big companies win? A win/win, sure, but not the "GE is finished" sort of opening.
I think that a core argument here is that SV can come in and eat these conglomerate's lunches in certain verticals. But that's fine! So many of these companies are in so many domains that having one division go to zero is something that's happened at the beginning of time, right?
So there's an argument that going against these huge companies is a Good Idea(TM). But the success of the SV company does not mean the collapse of GE/J&J/Coca-Cola. Not to mention Wal-Mart.
Amazon is a good counter-example to what I'm saying, as it has taken significant market share from so many different industries. I wonder if SV really has the guts to make "real" capital investments like with Amazon again.
Space X happened because a billionaire just through all his money in, but the "traditional" financing companies (banks) are making those kinds of big bets all the time! I think we're still a ways off from capital-intensive startups ("real money") from getting those. Especially with the 20+ year lead time necessary.
I kinda see the argument for oil going to zero, but transportation is only 1/3rd of oil expenditure. I think Exxon-Mobil will still sell stuff for a while.
- r00fus 10y ago> But if all the big companies buy the successful unicorns.... didn't the big companies win? This is the wrong assumption. The winners in this scenario are the investors who invested early in DSC and exited on purchase. Lather, rinse, repeat.
- shas3 10y agoI totally agree! Also, there is plenty of variance and random luck in the fate of companies. Kodak went down, yes. But many other similar companies survived and thrived. GE once sold personal computers and 3M, magnetic tapes. But they successfully extricated themselves from these businesses when they became difficult to profit off of. While there are certainly deterministic reasons for this, one shouldn't discount the effect of luck. People forget how diversified these companies are. The positions they themselves hold, in terms of markets, are hedged- with short and long bets. Just because they are hedging their bets more by buying Dollar-Shave-Clubs and Jet.coms doesn't mean there's a bubble. Additionally, on the tech/start-up side too, there were many shorter-lived companies that never lived up to the hype or declined from a position of unrivaled greatness (Cray?). If there is a fatal error in the OP, it is in the certainty and needless cocksureness of McClure's predictions. Given the huge sizes of these markets and the value of products and commodities, it is laughable to predict an imminent decline in companies that do pharmas, chemicals, industrials, medical devices, etc. based on metrics cherrypicked to create such a narrative (e.g. shift in highest-revenue companies).