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Today I woke up and read that PE is dead. Then I got into the office and saw that they have removed access to Diet Coke. Now I know for sure that PE is dead.
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PE Associate
106 posts
PE Associate
@PE_Associate
I share tips, humour and commentary about my experience as growth / private equity investor at mega fund
California, USA Katılım Mayıs 2014
179 Takip Edilen140 Takipçiler
@JaredKubin It’s a JPM equity research chart. I’m curious what you think the crime is
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Howard is one of the GOATs … so i call egregious chart crime on whatever first year analyst gave him this chart.
It’s very enticing … and wrong. Perfect for X fodder.
Patient Investor@patientinvestor
Howard Marks: "When you buy the S&P 500 at a 23x P/E, your 10-yr annualized return has always fallen between +2% and –2%, IN EVERY CASE, EVERY CASE!"
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@TheIcahnist We spoke to a leading software sellside IB last week (think Qatalyst, Union Square etc.) and they said right now is the least live tech sellsides they have had since the pandemic first hit…
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Private Equity exits collapsed 36% in Q1.
Software was supposed to be the golden goose.
The AI selloff crushed software multiples. Sponsors holding 2021-vintage assets can't clear their valuation hurdles.
Several flagship software exits have stalled.
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@NFW987 @TheSalonDon Showing this to my AD next time he tells me he has no stock of Rolex
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@PE_Associate @TheSalonDon IWC??? Now tell us about your Acura and your premium economy international flights
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@y0urc0nscience1 @chamath Earnings mostly (price moved a lot but corrected down post Iran)
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@PE_Associate @chamath So what changed- price, or earnings?
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don't worry. we are moving up and to the left. the days of 3-5% equity yields don't make sense sense if AGI is real. it isn't the safe harbor you think it is...
Patient Investor@patientinvestor
Howard Marks: "When you buy the S&P 500 at a 23x P/E, your 10-yr annualized return has always fallen between +2% and –2%, IN EVERY CASE, EVERY CASE!"
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@market_timer_44 @patientinvestor That data is wrong, check Bloomberg or FactSet
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Howard Marks:
"When you buy the S&P 500 at a 23x P/E, your 10-yr annualized return has always fallen between +2% and –2%, IN EVERY CASE, EVERY CASE!"
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Today, I am putting Virginia & America First, to announce that I am running as an Independent for U.S. Senate.
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Why I think PE is (maybe) dying:
We pay way too much: Prices are no longer connected to cash flow (and as a result LTVs are very low) meaning leverage drives little value and there is more downside risk than upside risk on exit multiple. This basically shifts the entire returns distribution to the left.
Less fixable businesses: Businesses today are run much better than they were 25 years ago. If you try to buy a large/mid-cap business in almost any sector, the founder will be savvy enough to have pulled most of the value creation levers you would have. Much less primary value = lower incremental value provided by control and lower returns
Less engaged leadership: Senior leaders really don’t seem to care as much anymore (most of them have already made their money). All of them deserve credit for the funds they’ve built but it is very obvious to juniors at every large fund that ICs have stopped underwriting deals as though their careers / the future of the fund depends on it. Which is why every major fund got caught flat footed by the SaaSpocalypse even though juniors at every major fund were begging seniors not to buy SaaS at these prices in the last year
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@jenny_wen Completely agree - what’s the point of an AI notes transcript you don’t remember
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@exec_sum Yes but Jim Cramer said the credit markets are safe so it’s all good
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@JadeCole2112 Completely agree. The problem is it takes quite a while to learn how LLMs work. No senior leader is willing to put in the time
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A few reasons:
- Most of them are non technical and think the ChatGPT experience translates into everything
- Any way to cut costs is interesting to them
teo@teodorio
Why has AI psychosis affected primarily high level executives? Is it because they have no easy way to empirically see the limitations?
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@NoahKingJr I think a lot of people forget how quickly Anthropic caught up to OpenAI - the inference being that the “winner” might not be any of the big names today
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The KKR CoolIT deal is awesome. But the part I find most interesting is that it was out of their Impact Fund. Almost every outsized return for large GPs these days comes outside of their core PE strategy (because they aren’t paying 20x+!). Lesson in that
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@AndrewYang He’s quite good at this. He should start a show where he hires people and then publicly fires them
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Trump seems to throw his own people under the bus an awful lot.
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@MrFamilyOffice Of course, but much easier for some than others on a relative basis
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@PE_Associate Agency is going against the script
I think it’s hard for everyone
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The wealthy say agency creates wealth
The poor say wealth creates agency
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PE Associate retweetledi
You have no experience.
You’ve never started a company.
You’ve never had a full time job.
Nike is going to kill you.
You’re a kid.
You don’t have technical skills.
You shouldn’t build hardware.
Apple is going to kill you.
You can’t build hardware.
You can’t measure heart rate non-invasively.
Athletes don’t care about recovery.
Under Armour is going to kill you.
It won’t be accurate.
You don’t listen.
You’re an ineffective leader.
You can’t recruit great talent.
You’re going to have to pay every athlete.
You can’t measure sleep non-invasively.
It’s too expensive to research.
Athletes are a small market.
The product costs too much to make.
The product costs too much to sell.
Your valuation is too high.
Consumers aren’t going to want it.
Hardware is too hard.
You should measure steps.
Fitbit is going to kill you.
You can’t build a marketing engine.
You can’t raise enough money.
You need a real CEO.
Google is going to kill you.
You can’t be a subscription.
You can’t build a brand.
You can’t do consumer in Boston.
Your valuation is too high.
You shouldn’t make accessories.
You shouldn’t make apparel.
Lululemon is going to kill you.
You can’t predict Covid.
Stay in your niche.
You are going to run out of money.
You can’t build a health platform.
Amazon is going to kill you.
You can’t measure blood pressure.
You can’t get medical approvals.
The market is too small.
You don’t understand AI.
The market is too competitive.
It won’t work internationally.
The supply chain is too complicated.
You can’t build an AI.
You can’t raise enough money.
It’s too competitive.
Healthcare isn’t going to want it.
…
Just keep going ✌️
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@ujjwalscript Completely agree. The new adjacent product launches are very telling. Replit launched a HR platform???
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The “Vibe Coding” honeymoon is officially OVER.
For a while, it felt magical. Prompt in, product out. No deep context, no architecture, no trade-offs. Just vibes.
But reality is catching up:
• Systems still need to scale
• Edge cases still exist
• Debugging still hurts
• And someone still has to own the code
AI didn’t replace engineering, it amplified the gap between people who understand systems and people who don’t.
“Vibe coding” is great for getting started.
But shipping real, reliable software? That still requires thinking.
The engineers who win won’t be the ones who vibe the fastest - they’ll be the ones who understand what the vibe produced.
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@theroberthu @conorsen Population is only getting older on average over time
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@conorsen What happens to these numbers when healthcare hiring finally hits a wall?
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