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jasonfried: You write, "this isn’t a traditional investment. We’re not looking to get out, we’re looking to stay in." I have to disagree with your choice of wo
by cs702 14y ago
jasonfried: You write, "this isn’t a traditional investment. We’re not looking to get out, we’re looking to stay in."
I have to disagree with your choice of words: the investment you guys just made is the truly traditional, old-fashioned kind. Consider what John Maynard Keynes wrote about the difference between the way in which professional investors invest in a business, versus the way in which entrepreneurs since time immemorial have committed capital to business endeavors. Most professional investors, Keynes wrote:
are, in fact, largely concerned, not with making superior long-term forecasts
of the probable yield of an investment over its whole life, but with foreseeing
changes in the conventional basis of valuation a short time ahead of the
general public. They are concerned, not with what an investment is really worth
to a man who buys it "for keeps," but with what the market will value it at,
under the influence of mass psychology, three months or a year hence.[1]
Before the advent of financial markets, all investments were made "for keeps" by people looking to "stay in."
Congratulations on making a traditional investment.
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PS. FWIW, Keynes accumulated a fortune by investing his own capital during his lifetime.
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[1] http://gutenberg.net.au/ebooks03/0300071h/printall.html http://gutenberg.net.au/ebooks03/0300071h/printall.html
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Edits: added more context and clarified my key point.
- jasonfried 14y agoFair point. I'm glad you knew what I actually meant ;) I've updated the post to reflect more of what I meant. This isn't the type of tech investment you normally read about.
- cs702 14y agoThanks for doing that, and thanks for writing the post. We need more people thinking this way, sincerely trying to build businesses and organizations of lasting value :-)
- pilsetnieks 14y agoI don't see how Keynes' description contradicts Jason's notion of traditional investing.
- cs702 14y agopilsetnieks: before financial markets made it possible for people to exit their investments with relative ease, all investments throughout history were made "for keeps" by people looking to "stay in" essentially forever. The idea of "investing temporarily" (which almost qualifies as an oxymoron in my view) is a more recent development, but has become dominant to the point that it is now considered "traditional."
- pilsetnieks 14y agoOh, ok. Before the clarification it just seemed that you used the Keynes' quote as a description of traditional professional investing.
- jpdoctor 14y ago> PS. FWIW, Keynes accumulated a fortune by investing his own capital during his lifetime. And FWIW: He also lost a fortune by investing in his own lifetime. (He was nearly wiped out in the 1929 crash, which he failed to foresee.)
- sausman 14y ago+1 The Super Myth of Keynes as a Great Stock Market Investor: http://www.economicpolicyjournal.com/2012/03/super-myth-of-keynes-as-great-stock.html http://www.economicpolicyjournal.com/2012/03/super-myth-of-k... He was 83% long going into the downturn that resulted in the 1929 crash (p. 21)So how could Keynes be a great investor with such a bad performance? Because Keynes, the evil bastard, along with Bernard Baruch, talked FDR into confiscating the gold owned by all Americans. He then loaded up his portfolio with gold mining stocks and then urged FDR to prop up the price of gold. ... Bottom line, as far as I'm concerned, Keynes was a terrible investor, as shown by his pre-gold mining stock losses. The only time he made real money in the markets was when he traded on inside information about FDR's plan to drive the gold price up, and loaded up on gold mining stocks. Got that? The man who called gold a "barbarous relic" in his 1924 book, Monetary Reform, had 66% of his portfolio in gold mining stocks in the 1930s.
- deleted 14y ago[deleted]
- cs702 14y agojpdoctor: what are your sources? I ask only because according to the reputable sources I've read, Keynes made a fortune from his investments, and he also made a lot of money for Cambridge University, whose portfolio he managed for a few decades. Here's some reliable information on his track record as an investor: * The Economist: http://www.economist.com/blogs/freeexchange/2012/06/keynesian-investment http://www.economist.com/blogs/freeexchange/2012/06/keynesia... * The Financial Times: http://www.ft.com/intl/cms/s/0/31f0e3f8-eaba-11e1-984b-00144feab49a.html http://www.ft.com/intl/cms/s/0/31f0e3f8-eaba-11e1-984b-00144... * University of Cambridge/London School of Economics: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2023011 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2023011 I'd also recommend Lord Skidelsky's excellent book on Keynes.