5 ms·

This is still underperforming the sp500 who went up 87% in the same 5 years.

paxys 5y ago
It's not as simple a comparison. We don't know the annual return % since all the money wasn't invested on day 1 but at various different points over 5 years. And the majority of it is still tied up in companies that haven't exited yet, so the value is mostly theoretical.
- hartator 5y ago
  Sp500 is meant to be the benchmark. This is very unfair to present worst numbers than the benchmark and present it as a win even if numbers can be off.
  - paxys 5y ago
    Vision Fund's minimum term is 12 years, and it will likely go on for a lot longer than that. Comparing its very early years to a stock market bull run is pointless. Like 40 out of 400-500 total investments have even seen an exit yet.
  - zippy5 5y ago
    I mean, 90% of large cap investors have underperformed the sp500. It's not about optimal returns, it's about diversification and portfolio risk. The Saudi's want some of their money in things that aren't correlated with oil, and pretty much everything in the physical word is. Technology is one of the few things that may even be inversely correlated. https://www.cnbc.com/2020/09/18/stock-picking-has-a-terrible-track-record-and-its-getting-worse.html https://www.cnbc.com/2020/09/18/stock-picking-has-a-terrible...
    - ashtonkem 5y ago
      That's assuming that the Saudis are being rational with their money. Given that they are currently trying to build a city that's a straight line[0], and a "shape based" floating octagon city[1], that assumption might not be correct. It's entirely likely that the real answer has less to do with Softbank's performance and their need to diversify, and more to do with MBS liking Masayoshi Son. 0 - https://www.architecturaldigest.com/story/saudi-arabia-building-100-mile-long-linear-city https://www.architecturaldigest.com/story/saudi-arabia-build... 1 - https://markets.businessinsider.com/news/stocks/saudi-arabia-oxagon-floating-eight-sided-city-2021-11 https://markets.businessinsider.com/news/stocks/saudi-arabia...
      - allisdust 5y ago
        The line one actually looks brilliant. It has the appeal of letting any new growth easily happen and keep transport options simple. Though most likely there will be uneven development even on this design.
        ashtonkem 5y ago
        It's genuinely the dumbest city design I have ever seen, and it makes transport an absolute nightmare assuming you're interacting with real technology and not magic. Cities are generally round for a good reason. You put the important stuff in the middle and your average transit trip remains as low as possible. Straight lines do the opposite, as you guarantee that each new resident is in literally the worst possible position for transit possible, and you over tax the center’s transit in order to move people to the ends of the line. Oh, and consider the cost for things like sewage and water. They’re a bit component of a city’s cost, and here they’re laid out as inefficiently as possible.
        allisdust 5y ago
        May be. But think not about the utilization or optimization for a moment and focus on the maintainability and buildability aspects. Something that looks this regular probably be both built and maintained through pure automation. I mean self driving is super simple in this layout (as they mention their transport is automated). Compare the same to the ever expanding cities that quickly run out of central space and end up having a premium center and poor suburbs. Obviously line is not the only thing that can provide these benefits. How about a large square or circle with the center purely reserved for green space. Anything beats the shitty cities we have today where people stay outside because they cant afford the rent and have to travel towards the center for work.
okhobb 5y ago
Investors in Vision Fund likely have the goal of returns for this investment that are not similar to the S&P 500 or other public equity indices. I'd further bet that 15-20% annualized is considered a very good result for this part of those investors' portfolios.
- hartator 5y ago
  sp500 has both better returns and better diversification so less overall risks. And I am sure Vision Fund has higher expenses ratio than most of sp500 indexes. The only ones winning here is the execs of the fund.
  - FanaHOVA 5y ago
    You aren't understanding how capital and risk allocation work at a portfolio level. The people putting money in the SoftBank funds ALREADY have hundreds of billions invested in public equities. They are looking to diversify their portfolio across different asset classes. Your comment isn't relevant.
    - cerved 5y ago
      maybe it's just me but the tone of this comment reads unnecessarily hostile
    - smabie 5y ago
      This is correct: an uncorrected return stream that underperforms market beta is often still highly desirable / sought after.
      - allisdust 5y ago
        Probably meant *correlated
        smabie 5y ago
        No I meant uncorrelated
Goety 5y ago
The pandemic killed a lot of good bets at Soft Bank. The rogue wave was not kind to anyone.
sytelus 5y ago
If you went 5 years back, I don’t think you would have predicted that sp500 will be yielding 87%. At that point in time, SoftBank would have looked pretty reasonable. So there is a survivorship bias when people compare with sp500. Now, let’s look at next 5 years. Would you be willing to bet that sp500 continues its streak? Would all macro-economic coincidences and government actions continue in same manner for next 5 years?

It's not as simple a comparison. We don't know the annual return % since all the money wasn't invested on day 1 but at various different points over 5 years. And the majority of it is still tied up in companies that haven't exited yet, so the value is mostly theoretical.

hartator 5y ago
Sp500 is meant to be the benchmark. This is very unfair to present worst numbers than the benchmark and present it as a win even if numbers can be off.
- paxys 5y ago
  Vision Fund's minimum term is 12 years, and it will likely go on for a lot longer than that. Comparing its very early years to a stock market bull run is pointless. Like 40 out of 400-500 total investments have even seen an exit yet.
- zippy5 5y ago
  I mean, 90% of large cap investors have underperformed the sp500. It's not about optimal returns, it's about diversification and portfolio risk. The Saudi's want some of their money in things that aren't correlated with oil, and pretty much everything in the physical word is. Technology is one of the few things that may even be inversely correlated. https://www.cnbc.com/2020/09/18/stock-picking-has-a-terrible-track-record-and-its-getting-worse.html https://www.cnbc.com/2020/09/18/stock-picking-has-a-terrible...
  - ashtonkem 5y ago
    That's assuming that the Saudis are being rational with their money. Given that they are currently trying to build a city that's a straight line[0], and a "shape based" floating octagon city[1], that assumption might not be correct. It's entirely likely that the real answer has less to do with Softbank's performance and their need to diversify, and more to do with MBS liking Masayoshi Son. 0 - https://www.architecturaldigest.com/story/saudi-arabia-building-100-mile-long-linear-city https://www.architecturaldigest.com/story/saudi-arabia-build... 1 - https://markets.businessinsider.com/news/stocks/saudi-arabia-oxagon-floating-eight-sided-city-2021-11 https://markets.businessinsider.com/news/stocks/saudi-arabia...
    - allisdust 5y ago
      The line one actually looks brilliant. It has the appeal of letting any new growth easily happen and keep transport options simple. Though most likely there will be uneven development even on this design.
      - ashtonkem 5y ago
        It's genuinely the dumbest city design I have ever seen, and it makes transport an absolute nightmare assuming you're interacting with real technology and not magic. Cities are generally round for a good reason. You put the important stuff in the middle and your average transit trip remains as low as possible. Straight lines do the opposite, as you guarantee that each new resident is in literally the worst possible position for transit possible, and you over tax the center’s transit in order to move people to the ends of the line. Oh, and consider the cost for things like sewage and water. They’re a bit component of a city’s cost, and here they’re laid out as inefficiently as possible.
        allisdust 5y ago
        May be. But think not about the utilization or optimization for a moment and focus on the maintainability and buildability aspects. Something that looks this regular probably be both built and maintained through pure automation. I mean self driving is super simple in this layout (as they mention their transport is automated). Compare the same to the ever expanding cities that quickly run out of central space and end up having a premium center and poor suburbs. Obviously line is not the only thing that can provide these benefits. How about a large square or circle with the center purely reserved for green space. Anything beats the shitty cities we have today where people stay outside because they cant afford the rent and have to travel towards the center for work.

okhobb 5y ago

Investors in Vision Fund likely have the goal of returns for this investment that are not similar to the S&P 500 or other public equity indices. I'd further bet that 15-20% annualized is considered a very good result for this part of those investors' portfolios.

hartator 5y ago
sp500 has both better returns and better diversification so less overall risks. And I am sure Vision Fund has higher expenses ratio than most of sp500 indexes. The only ones winning here is the execs of the fund.
- FanaHOVA 5y ago
  You aren't understanding how capital and risk allocation work at a portfolio level. The people putting money in the SoftBank funds ALREADY have hundreds of billions invested in public equities. They are looking to diversify their portfolio across different asset classes. Your comment isn't relevant.
  - cerved 5y ago
    maybe it's just me but the tone of this comment reads unnecessarily hostile
  - smabie 5y ago
    This is correct: an uncorrected return stream that underperforms market beta is often still highly desirable / sought after.
    - allisdust 5y ago
      Probably meant *correlated
      - smabie 5y ago
        No I meant uncorrelated

Goety 5y ago

The pandemic killed a lot of good bets at Soft Bank. The rogue wave was not kind to anyone.

sytelus 5y ago

If you went 5 years back, I don’t think you would have predicted that sp500 will be yielding 87%. At that point in time, SoftBank would have looked pretty reasonable. So there is a survivorship bias when people compare with sp500. Now, let’s look at next 5 years. Would you be willing to bet that sp500 continues its streak? Would all macro-economic coincidences and government actions continue in same manner for next 5 years?