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Selling1


I like to think of the investing discipline as composed of three key modes of operation. Buying – Figuring out what you should buy and what you should not buy. There are many strategies that work here but my favorite is buying things that others are not buying. And my preferred reason for “others not buying” is that they don’t know about it yet. Managing – This is the work an investor does to manage the investment. It includes decisions around whether to buy more of an investment that is working, which is incredibly important and can massively impact returns. But I believe that the most powerful thing an investor can do to impact their investment is to work with the management of the investment to make sure that the team is making the right strategic and operational decisions. Selling – This is all about when to exit an investment and how. It is the hardest part of the investing discipline in my view. The conventional wisdom on selling is that an investor should set a target price when they buy and once an investment reaches that target price they should sell. That approach doesn’t work very well in venture capital because as a minority investors in an illquid investment, we don’t control the sell decision. That doesn’t mean I/we don’t have targets when we make our investments. But it does mean that we don’t usually have the ability to do sell when those targets are hit. And, as a result of this dynamic in venture capital, I have learned a different lesson over the years about selling and that is to let your winners run and sell everything else. As I mentioned previously, as minority investors in illiquid investments we don’t control the sell decisions. They are made by the Board and driven strongly by the founders and management. But that said, when we have the opportunity to sell an investment that is not one of our big winners, I have found that it is generally the right idea to do that. When you make an investment that is really working out, I have found that it is generally a good idea to hold on to it even when it goes past your original sell targets for it. It can be a useful discipline to develop new sell targets when this happens based on the new information you have about this investment. In the venture capital business, your best investments often go public and the venture capital fund distributes the stock to the underlying investors (called LPs) in the venture fund. Those investors then have to make the sell decisions on those investments. As a general partner in these venture capital funds, I receive these distributions too. And, as a result of some really poor decisions earier in my career around selling or not selling public stocks that were distributed to me, I have developed an approach for selling stock that is distributed to me. I like to sell one third of the position immediately, put one third away for a long term hold, and actively manage the other third. This method insures that if the whole thing blows up, at least we got something out. If it goes up 10x or more, at least we didn’t miss out on all of that. And it is simple and easy to execute and we do it this way all of the time. But even with all of these lessons I have learned and approaches I have developed over the years, I continue to struggle with selling. It is hard for me to do and I resist the urge, particularly with the big winners. It is like taking your medicine. You know it is the right thing to do but it doesn’t feel very good when you do it. https://avc.com/2018/08/selling-2/

Selling1


I like to think of the investing discipline as composed of three key modes of operation. Buying – Figuring out what you should buy and what you should not buy. There are many strategies that work here but my favorite is buying things that others are not buying. And my preferred reason for “others not buying” is that they don’t know about it yet. Managing – This is the work an investor does to manage the investment. It includes decisions around whether to buy more of an investment that is working, which is incredibly important and can massively impact returns. But I believe that the most powerful thing an investor can do to impact their investment is to work with the management of the investment to make sure that the team is making the right strategic and operational decisions. Selling – This is all about when to exit an investment and how. It is the hardest part of the investing discipline in my view. The conventional wisdom on selling is that an investor should set a target price when they buy and once an investment reaches that target price they should sell. That approach doesn’t work very well in venture capital because as a minority investors in an illquid investment, we don’t control the sell decision. That doesn’t mean I/we don’t have targets when we make our investments. But it does mean that we don’t usually have the ability to do sell when those targets are hit. And, as a result of this dynamic in venture capital, I have learned a different lesson over the years about selling and that is to let your winners run and sell everything else. As I mentioned previously, as minority investors in illiquid investments we don’t control the sell decisions. They are made by the Board and driven strongly by the founders and management. But that said, when we have the opportunity to sell an investment that is not one of our big winners, I have found that it is generally the right idea to do that. When you make an investment that is really working out, I have found that it is generally a good idea to hold on to it even when it goes past your original sell targets for it. It can be a useful discipline to develop new sell targets when this happens based on the new information you have about this investment. In the venture capital business, your best investments often go public and the venture capital fund distributes the stock to the underlying investors (called LPs) in the venture fund. Those investors then have to make the sell decisions on those investments. As a general partner in these venture capital funds, I receive these distributions too. And, as a result of some really poor decisions earier in my career around selling or not selling public stocks that were distributed to me, I have developed an approach for selling stock that is distributed to me. I like to sell one third of the position immediately, put one third away for a long term hold, and actively manage the other third. This method insures that if the whole thing blows up, at least we got something out. If it goes up 10x or more, at least we didn’t miss out on all of that. And it is simple and easy to execute and we do it this way all of the time. But even with all of these lessons I have learned and approaches I have developed over the years, I continue to struggle with selling. It is hard for me to do and I resist the urge, particularly with the big winners. It is like taking your medicine. You know it is the right thing to do but it doesn’t feel very good when you do it. https://avc.com/2018/08/selling-2/

Selling1


I like to think of the investing discipline as composed of three key modes of operation. Buying – Figuring out what you should buy and what you should not buy. There are many strategies that work here but my favorite is buying things that others are not buying. And my preferred reason for “others not buying” is that they don’t know about it yet. Managing – This is the work an investor does to manage the investment. It includes decisions around whether to buy more of an investment that is working, which is incredibly important and can massively impact returns. But I believe that the most powerful thing an investor can do to impact their investment is to work with the management of the investment to make sure that the team is making the right strategic and operational decisions. Selling – This is all about when to exit an investment and how. It is the hardest part of the investing discipline in my view. The conventional wisdom on selling is that an investor should set a target price when they buy and once an investment reaches that target price they should sell. That approach doesn’t work very well in venture capital because as a minority investors in an illquid investment, we don’t control the sell decision. That doesn’t mean I/we don’t have targets when we make our investments. But it does mean that we don’t usually have the ability to do sell when those targets are hit. And, as a result of this dynamic in venture capital, I have learned a different lesson over the years about selling and that is to let your winners run and sell everything else. As I mentioned previously, as minority investors in illiquid investments we don’t control the sell decisions. They are made by the Board and driven strongly by the founders and management. But that said, when we have the opportunity to sell an investment that is not one of our big winners, I have found that it is generally the right idea to do that. When you make an investment that is really working out, I have found that it is generally a good idea to hold on to it even when it goes past your original sell targets for it. It can be a useful discipline to develop new sell targets when this happens based on the new information you have about this investment. In the venture capital business, your best investments often go public and the venture capital fund distributes the stock to the underlying investors (called LPs) in the venture fund. Those investors then have to make the sell decisions on those investments. As a general partner in these venture capital funds, I receive these distributions too. And, as a result of some really poor decisions earier in my career around selling or not selling public stocks that were distributed to me, I have developed an approach for selling stock that is distributed to me. I like to sell one third of the position immediately, put one third away for a long term hold, and actively manage the other third. This method insures that if the whole thing blows up, at least we got something out. If it goes up 10x or more, at least we didn’t miss out on all of that. And it is simple and easy to execute and we do it this way all of the time. But even with all of these lessons I have learned and approaches I have developed over the years, I continue to struggle with selling. It is hard for me to do and I resist the urge, particularly with the big winners. It is like taking your medicine. You know it is the right thing to do but it doesn’t feel very good when you do it. https://avc.com/2018/08/selling-2/

The First Amendment Ignorance


Source: http://themusingsofthebigredcar.com/the-first-amendment-ignorance/ The First Amendment, Big Red Car? What about it? Everybody knows about the First Amendment. Big Red Car here on a grayish morning, but it will burn off soon. So, I’m looking at a study with alarming results. Out of 1,000 persons surveyed only ONE was able to name the five rights protected by the First Amendment to the United States Constitution. Worse still, 40% of the respondents could not mention a single right. The first ten amendments to the US Constitution are contained in a document called the Bill of Rights. How is that possible? Take a second, can you name any of the rights protected by the First Amendment? Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. It is a single sentence long. In the vernacular, the five rights are described as:  1. Freedom of RELIGION – 15% got this one;  2. Freedom of SPEECH – 56%;  3. Freedom of the PRESS – 13%.  4. Right of peaceful ASSEMBLY – 12%  5. Right to PETITION the Government – 2%. Sheesh! We are ignorant of our own founding document, the US Constitution. But, hey, what the Hell do I really know anyway? I’m just a Big Red Car, but I know the five rights of the First Amendment. Do you? Yes you do, now. Have a great week, y’all.   Share this:TweetShare on TumblrPrint Related Source: http://themusingsofthebigredcar.com/the-first-amendment-ignorance/

Voice Input – Some Observations


I have an excellent voice assistant on my Android phone. I never use it. I could be dictating this blog post using the same voice assistant. I don’t do that except when I want to prove that I can. We have had Alexa and Google Home in our home. We shut them off and sent them away. But we use the Siri voice assistant on our AppleTV all the time. Why? Well for one, searching for video content does not have to be exact. Just close enough. So when you say “Allen Iverson crossover Michael Jordan” into your AppleTV remote, even if Siri doesn’t translate that perfectly, YouTube understands it and delivers up one of my favorite basketball moments reliably. Second, the keypad entry on AppleTV is horrible. I spent some time yesterday setting up apps, entering passwords, etc and it is about the most frustrating experience I’ve had on a computer in a long time. Siri on the AppleTV is so much better than the alternative and reliably good enough that it has become the way we interact with our AppleTV. Another example is my car. I have a Jeep and it has this awful smart car UI called UConnect in it. It’s the worst. Except I can say “call Joanne Wilson” while I am driving and it does that pretty reliably. I have called a person we know named Jan Wilson a few times by accident, but that is way better than another kind of a accident in my Jeep. So while voice imput has not taken hold in our life where text input works reliably and conveniently, it has taken hold where text input is not reliable, convenient, or safe. What this tells me is the path forward for voice input technology, which has gotten very good, is in applications that are not mainstream yet but can get mainstream by solving the data input problem. And, in fact, that is what is already happening. https://avc.com/2018/08/voice-input-some-observations/