1/ Releasing year-end redacted Lux quarterly letter to LPs
Our theme is: the power of ‘AND’
-raising fortress balance sheet cash + husbanding it wisely
-a coming wave of consolidation + M&A
-the macro, margin debt + market structure
-Magritte’s “Perspicacity”
-and much more…
Our theme is: the power of ‘AND’
-raising fortress balance sheet cash + husbanding it wisely
-a coming wave of consolidation + M&A
-the macro, margin debt + market structure
-Magritte’s “Perspicacity”
-and much more…
2/ We are transitioning from CONJUNCTION…
to a period of DISJUNCTION
From “and” as neutral combination…
to “and yet” as expression of contrast
Comfort and complacency create conditions
for risk, instability + vulnerability
To FORESEE a risk is to help PREVENT its occurence
to a period of DISJUNCTION
From “and” as neutral combination…
to “and yet” as expression of contrast
Comfort and complacency create conditions
for risk, instability + vulnerability
To FORESEE a risk is to help PREVENT its occurence
3/ We told Lux cos in 2021:
expect good AND bad market conditions AND be so well-capitalized to be unfettered by fear AND prepared to pounce
~90% of our holdings are funded into 2023
We made 136 distinct investments AND our co’s raised over $12.6B with 21 each raising >$100M
expect good AND bad market conditions AND be so well-capitalized to be unfettered by fear AND prepared to pounce
~90% of our holdings are funded into 2023
We made 136 distinct investments AND our co’s raised over $12.6B with 21 each raising >$100M
4/ In 2022 we advise
husband your cash AND consolidate your position
DO it as quietly as you can
DO it as loudly as you can—just DO it
Consolidation is the ultimate corporate “AND”
(customers, tech, market position)
so you can emerge stronger, fitter + get ready to stand out
husband your cash AND consolidate your position
DO it as quietly as you can
DO it as loudly as you can—just DO it
Consolidation is the ultimate corporate “AND”
(customers, tech, market position)
so you can emerge stronger, fitter + get ready to stand out
5/ Magritte's "Perspicacity" aptly captures Lux’s unusual approach
a painter stares studiously at an egg—THAT WHICH IS
as he paints a bird on the canvas—THAT WHICH MAY BE
It's an egg—AND YET—it will be a bird
Through combination, transformation…
a painter stares studiously at an egg—THAT WHICH IS
as he paints a bird on the canvas—THAT WHICH MAY BE
It's an egg—AND YET—it will be a bird
Through combination, transformation…
6/TIME ARBITRAGE—is the main advantage available to all
seized by few
Like the coupling of butterflies fluttering above AND below aware of eachother—OPAQUE to PROBABILITY—valuations fluctuate above + below volatiley
Any investment is
the pairing of an ALLOCATION + an ASSUMPTION
seized by few
Like the coupling of butterflies fluttering above AND below aware of eachother—OPAQUE to PROBABILITY—valuations fluctuate above + below volatiley
Any investment is
the pairing of an ALLOCATION + an ASSUMPTION
7/ Margin debt at $910B = highest level ever
wild swings are symptomatic of high-startle response from high uncertainty that some may know something that others don’t—when mostly NOBODY knows NOTHING
market reversion to the MEAN
MEANS a reversion to lower exit values
wild swings are symptomatic of high-startle response from high uncertainty that some may know something that others don’t—when mostly NOBODY knows NOTHING
market reversion to the MEAN
MEANS a reversion to lower exit values
8/ All US recessions have been preceded by an INVERTED YIELD CURVE—though not every inverted curve was followed by a recession
We see potential for “BIFLATION”
AND
environmentalists have TOO QUICKLY overlooked the severe economic pain of switching TOO QUICKLY from coal + natgas
We see potential for “BIFLATION”
AND
environmentalists have TOO QUICKLY overlooked the severe economic pain of switching TOO QUICKLY from coal + natgas
9/“Occupy Fed” movement is possible
Govt’s can lose control AND govts can take it
Global TECH challenges + opportunities
-US vs China vs Russia
-African continent
-Capital vs Labor
-Space Race 2.0
On “Consilience”—the unity of knowledge from different disciplines…
Govt’s can lose control AND govts can take it
Global TECH challenges + opportunities
-US vs China vs Russia
-African continent
-Capital vs Labor
-Space Race 2.0
On “Consilience”—the unity of knowledge from different disciplines…
10/
INVENTIONS
everything NEW comes from synthetic combinations
of everything OLD
PEOPLE
all of us contain MULTITUDES
Founders can be:
brilliant AND irascible
polarizing AND genius
compassionate AND careless
wordsmiths AND inumerates
great storytellers AND terrible operators
INVENTIONS
everything NEW comes from synthetic combinations
of everything OLD
PEOPLE
all of us contain MULTITUDES
Founders can be:
brilliant AND irascible
polarizing AND genius
compassionate AND careless
wordsmiths AND inumerates
great storytellers AND terrible operators
11/
invention of new tech can solve PAST problems AND create future problems to be solved by FUTURE tech
—“Yes AND”
An overlooked science AND an unknown but hungry founding tech team AND a terrifyingly ambitious dream––its crazy!..
AND YET…that’s what we search for every day
invention of new tech can solve PAST problems AND create future problems to be solved by FUTURE tech
—“Yes AND”
An overlooked science AND an unknown but hungry founding tech team AND a terrifyingly ambitious dream––its crazy!..
AND YET…that’s what we search for every day
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