6 ms·

The meaning of the Vision Fund

57 points by nopinsight 8y ago

peapicker 8y ago
Paywall. Other link?
- madspindel 8y ago
  Works in incognito
  - AdamM12 8y ago
    Thank you for this.
- known 8y ago
  http://archive.li/gtkYQ http://archive.li/gtkYQ
lawrenceyan 8y ago
Probably shouldn't have put so much in Uber...
- Havoc 8y ago
  Hindsight 20/20
simonh 8y ago
The question is does a Softbank investment simply increase the price of such investments, with underlying long term value staying unchanged, or does the investment actually increase value by stimulating greater growth in those investments? That's a tricky one. The fundamental principle venture capital works on is that investment stimulates growth. You invest in a company so that it can grow and make your investment more valuable. But at some point investment becomes excessive and wasteful, as in a bubble. Softbank is so big, it could quite conceivably stimulate a tech bubble all by itself, especially if rival investment firms 'bulk up' to compete. If that is the case, Softbank's flood of cash into tech will eventually destroy more value than it creates and the prudent response for an investor would be to reduce exposure to the tech market. But of course nobody wants to concede defeat, especially if your withdrawing investment actually makes Softbank's investments more likely to succeed by having a deflationary effect on the bubble. Interesting times.
- nopinsight 8y ago
  At least in markets with insufficient funding available, like in many developing countries, additional investment could potentially make a difference.
- gowld 8y ago
  Warren Buffett's Berkshire Hathaway is sitting on $70B cash just because he can't find anything worth investing it in. Major corporations have astronomical cash hoards awaiting tax holidays but also not finding any productive use in their waiting rooms across Europe.
  - vasco 8y ago
    They literally just bought 75 million more shares of Apple.
    - westpfelia 8y ago
      They just announced that they HAD been buying 75 million shares. The SEC would freak the fuck out if BRK tried to buy up that much apple in one day. As would the market. In reality they have been buying it in small chunks over the last several months.
      - taneq 8y ago
        Well, that's how it works, isn't it? You can't just buy the cream, you have to buy the guy who buys the cream...
    - Nokinside 8y ago
      Because they saw the cash mountain Apple was sitting on. After Apple announced $100 Billion stock buyback it was self evident to everybody why BRK did what it did.
  - Nokinside 8y ago
    Berkshire Hathaway buys only when the price is right and they are the opposite of VC investors. They make their best investments when "there is blood in the streets" and other investors are out of money. News always lament the lackluster performance of BRK before major stock market crash. "Has the Oracle of Omaha lost his touch?" If you compare BRK stock to SP500, you can see that when there is major correction in the stock market, BRK acquires permanent lead over SP500. Just go to any finance site and set starting point into * 10 March 2000 dot-com bubble crash, * 11 Oct 2007 * or even start of 2011 bear market and look how the BRK diverges from the SP500.
rdlecler1 8y ago
There are a lot of green field opportunities out there — technologies and solutions that will exist but which will need significant capital to get there. I think in 10 years from now we’ll look back on today and say that we were vastly underinvesting in technology and being too conservative given the size of the opportunity to create category defining companies from scratch.
- melling 8y ago
  You could have made the same statement any time in human history. Everything humans now know could have been learned hundreds of years ago if we’d had invested more in science and research. The technology of the early 23rd century, for example, could be obtained in 50 years with more investment in R&D today.
  - rdlecler1 8y ago
    Of course we could have sped up the rate of innovation with more investment but would have been economically viable. I’m specifically referring to investment by venture capital and the positive returns that will be generated over the next decade.
  - MadSudaca 8y ago
    > You could have made the same statement any time in human history. How are you so sure of this? To me it sounds too optimistic. It implies that we have been in control for the extent of our history, and I think this couldn't be farther from the truth. In fact, even today I'm feeling a bit pessimistic regarding our ability to overcome challenges such as changes in social dynamics and known/unknown threats introduced by technology.
baybal2 8y ago
My own opinion: this fund has a LOT of debt. At current microscopic interest rates, that is not much of a deal, but it will very well be once interest rates will go up. They need to make returns quickly to not to sink in interest. This should be mandating their line of action from now. 1. They will be downsizing, and offloading assets. 2. It looks very likely that this is just a gigantic LBO vessel for Son and Saudis 3. And it will be following a standard LBO play - buy, cut out tasty parts, sell to pay interests.

57 points by nopinsight 8y ago

peapicker 8y ago

Paywall. Other link?

madspindel 8y ago
Works in incognito
- AdamM12 8y ago
  Thank you for this.
known 8y ago
http://archive.li/gtkYQ http://archive.li/gtkYQ

lawrenceyan 8y ago

Probably shouldn't have put so much in Uber...

Havoc 8y ago
Hindsight 20/20

simonh 8y ago

The question is does a Softbank investment simply increase the price of such investments, with underlying long term value staying unchanged, or does the investment actually increase value by stimulating greater growth in those investments? That's a tricky one. The fundamental principle venture capital works on is that investment stimulates growth. You invest in a company so that it can grow and make your investment more valuable. But at some point investment becomes excessive and wasteful, as in a bubble. Softbank is so big, it could quite conceivably stimulate a tech bubble all by itself, especially if rival investment firms 'bulk up' to compete. If that is the case, Softbank's flood of cash into tech will eventually destroy more value than it creates and the prudent response for an investor would be to reduce exposure to the tech market. But of course nobody wants to concede defeat, especially if your withdrawing investment actually makes Softbank's investments more likely to succeed by having a deflationary effect on the bubble. Interesting times.

nopinsight 8y ago
At least in markets with insufficient funding available, like in many developing countries, additional investment could potentially make a difference.
gowld 8y ago
Warren Buffett's Berkshire Hathaway is sitting on $70B cash just because he can't find anything worth investing it in. Major corporations have astronomical cash hoards awaiting tax holidays but also not finding any productive use in their waiting rooms across Europe.
- vasco 8y ago
  They literally just bought 75 million more shares of Apple.
  - westpfelia 8y ago
    They just announced that they HAD been buying 75 million shares. The SEC would freak the fuck out if BRK tried to buy up that much apple in one day. As would the market. In reality they have been buying it in small chunks over the last several months.
    - taneq 8y ago
      Well, that's how it works, isn't it? You can't just buy the cream, you have to buy the guy who buys the cream...
  - Nokinside 8y ago
    Because they saw the cash mountain Apple was sitting on. After Apple announced $100 Billion stock buyback it was self evident to everybody why BRK did what it did.
- Nokinside 8y ago
  Berkshire Hathaway buys only when the price is right and they are the opposite of VC investors. They make their best investments when "there is blood in the streets" and other investors are out of money. News always lament the lackluster performance of BRK before major stock market crash. "Has the Oracle of Omaha lost his touch?" If you compare BRK stock to SP500, you can see that when there is major correction in the stock market, BRK acquires permanent lead over SP500. Just go to any finance site and set starting point into * 10 March 2000 dot-com bubble crash, * 11 Oct 2007 * or even start of 2011 bear market and look how the BRK diverges from the SP500.

rdlecler1 8y ago

There are a lot of green field opportunities out there — technologies and solutions that will exist but which will need significant capital to get there. I think in 10 years from now we’ll look back on today and say that we were vastly underinvesting in technology and being too conservative given the size of the opportunity to create category defining companies from scratch.

melling 8y ago
You could have made the same statement any time in human history. Everything humans now know could have been learned hundreds of years ago if we’d had invested more in science and research. The technology of the early 23rd century, for example, could be obtained in 50 years with more investment in R&D today.
- rdlecler1 8y ago
  Of course we could have sped up the rate of innovation with more investment but would have been economically viable. I’m specifically referring to investment by venture capital and the positive returns that will be generated over the next decade.
- MadSudaca 8y ago
  > You could have made the same statement any time in human history. How are you so sure of this? To me it sounds too optimistic. It implies that we have been in control for the extent of our history, and I think this couldn't be farther from the truth. In fact, even today I'm feeling a bit pessimistic regarding our ability to overcome challenges such as changes in social dynamics and known/unknown threats introduced by technology.

baybal2 8y ago

My own opinion: this fund has a LOT of debt. At current microscopic interest rates, that is not much of a deal, but it will very well be once interest rates will go up. They need to make returns quickly to not to sink in interest. This should be mandating their line of action from now. 1. They will be downsizing, and offloading assets. 2. It looks very likely that this is just a gigantic LBO vessel for Son and Saudis 3. And it will be following a standard LBO play - buy, cut out tasty parts, sell to pay interests.