Image Credit: Alex Nabaum
The biggest casualty of the postponed initial public offering for We Co., parent of the office-sharing business WeWork, isn’t the company or its bankers. It’s the myth that private markets are superior to public markets.
Investors have long been told that the stars of the financial universe are hedge-fund, venture-capital and private-equity managers. These supposedly visionary geniuses are said to be immune to the short-term thinking that poisons the public markets. Investment horizons should be longer, risks lower, returns higher.
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This article was originally published on The Wall Street Journal.
Further reading
Benjamin Graham, The Intelligent Investor
Jason Zweig, The Devil’s Financial Dictionary
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Little Book of Safe Money
Eliot Brown, “How Adam Neumann’s Over-the-Top Style Built WeWork” (WSJ)
F.A. Hayek, “The Use of Knowledge in Society” (American Economic Review, 1945)
“Capital Raising in the U.S.: An Analysis of the Market for Unregistered Securities Offerings, 2009‐2017” (U.S. Securities and Exchange Commission)
Will Gornall and Ilya A. Strebulaev, “Squaring Venture Capital Valuations with Reality” (Journal of Financial Economics)
Will Gornall, “How Do Venture Capitalists Make Decisions?” (Harvard Law School Forum on Corporate Governance and Financial Regulation)
Paul Gompers et al., “What Do Private Equity Firms Say They Do?” (Journal of Financial Economics)
Michael J. Mauboussin, “Who Is on the Other Side?” (BlueMountain Capital Management)