Kool-Aid

Today I talked to an advisor to high net worth investors and his mate, a ‘venture capitalist’ with a $20m ‘fund’.

They asked me a lot of questions and I answered them honestly.

One of them called me cynical.

I said no, no, not at all. I tried to explain that critique is the first step to defining problems and finding solutions.

But they didn’t want to know.

They would prefer to go along their current path where the mean is a negative return on investment and effort.

Anyone that believes they can beat a market mean over a long period is a moron. Especially when their skills are sub-par.

Where comes this self delusion?

Firstly, the masses are all behaving in the same manner. So the rabbits all feel justified in running down the same road towards the headlights.

Secondly, the field is awfully complex and it takes deep knowledge, experience and intelligence to deconvolute it. They have none of these attributes.

Thirdly, the tech investment environment works in long cycles of ten years plus. The truth behind the cyclical mass failures get lost in the face-saving excuses as people exit to more secure sinecures, none the wiser.

Finally, the free money from government and fools also happens to follow the orthodox set of lies. It makes sense to drink the Kool-Aid if it comes with a money back guarantee.

Back to the cynical label. They can’t move past it because they have no interest in confronting the point of the critique.

In this you have to admit that there is a certain animal cunning in this that has to be admired.