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> Allocating capital takes a lot of work, and a lot of courage. I don't think it does. Sitting on this kind of capital is easy, sprinkle it in enough places du

> Allocating capital takes a lot of work, and a lot of courage. I don't think it does. Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results. Add some contacts to that (like private phone calls with the FED) and it's even easier. Having capital is a shortcut to making things happen. What's difficult and takes work is bootstrapping without capital.

gottorf 3y ago
> Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results. It's easy when you're talking about someone's 401k with half a million dollars in it. With one click you can put it in the S&P 500, a 60/40 split, a target date fund, or if you're young and frisky maybe you put it in a mix of crypto, renewable energy companies with an uncertain future, and some pre-trial drug companies, because you can afford to lose it all. If you're BlackRock with $9T AUM and you know that it's other people's retirement money you're managing, it's a lot harder. That much capital moves markets. You can't go in and out of positions easily, because the very act of you buying or selling alters the price appreciably; that is, you're too big of a player to be an invisible participant in the market. Hell, even a high net worth individual looking to place $50mm isn't going to have an "easy" job, once you realize that the name of the game is actually preserving the purchasing power of that capital. That takes work. It doesn't come for free. > What's difficult and takes work is bootstrapping without capital. This is also true. But if managing capital was that easy, nobody rich would ever not be rich anymore. The Vanderbilt family was at one point estimated to be worth more than 1% of the US GDP; yet by the fourth generation, they sold their famous mansion, The Breakers.

gottorf 3y ago

> Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results. It's easy when you're talking about someone's 401k with half a million dollars in it. With one click you can put it in the S&P 500, a 60/40 split, a target date fund, or if you're young and frisky maybe you put it in a mix of crypto, renewable energy companies with an uncertain future, and some pre-trial drug companies, because you can afford to lose it all. If you're BlackRock with $9T AUM and you know that it's other people's retirement money you're managing, it's a lot harder. That much capital moves markets. You can't go in and out of positions easily, because the very act of you buying or selling alters the price appreciably; that is, you're too big of a player to be an invisible participant in the market. Hell, even a high net worth individual looking to place $50mm isn't going to have an "easy" job, once you realize that the name of the game is actually preserving the purchasing power of that capital. That takes work. It doesn't come for free. > What's difficult and takes work is bootstrapping without capital. This is also true. But if managing capital was that easy, nobody rich would ever not be rich anymore. The Vanderbilt family was at one point estimated to be worth more than 1% of the US GDP; yet by the fourth generation, they sold their famous mansion, The Breakers.