Predictions for 2023- The Good, The Bad, The Ugly and Some Goals

Good morning...

Yesterday, Knut and I discussed the year ahead on the 'Panic' Podcast.

I normally make predictions about the year ahead but I own so few stocks and so many T-Bills, I don't think my opinions matter re the stock market so I am taking the year off.  I hope stocks go to the moon. I do think the volatility in stocks continues to subside over the year and that most technology stocks will bottom ahead of private market prices.  I just do not have a feel for what the catalyst for them staging a strong rally would be.  Everyone is betting on lower interest rates as the catalyst and that has been a bad bet. 

I am looking at 2023 as a year of extra hard work helping our Social Leverage portfolio companies through a difficult economy.  Social Leverage did a great job returning a lot of capital in 2019, 2020, 2021 and even 2022, but because we invest in start-ups we cannot hit a button and sell at or near the top.  Based on the venture deployment data I have seen, we also did a good job sitting on our hands avoiding the FOMO of chasing deals the last few years.  Just 25 percent of our Fund 4 (launched in 2021) has been called and deployed.  No doubt we have made mistakes, and I have made some bigger mistakes with personal capital, but all in all, we are in a strong position to grind through what I feel will be a very tough 2023 in private markets.

$BOX CEO Aaron Levie said this about the venture capital industry the last 3-4 years which rings true to me:

I am mentally prepared for the hard year ahead helping our portfolio companies make hard decisions and position themselves for the next bull market.

I know a next bull market is ahead.  The 'buzz' is AI, specifically Open.AI and Chat GPT.  All the cool kids are fluttering.  You might like ben's Bite's newsletter on AI.  I have been reading it.

Because there is still so much money in the system, raised but not yet deployed, AI will be crowded and hyped and expensive to participate.  Speculation and FOMO have been shaken, not killed.

Like the beginning of the last bull market in technology in 2006, a fund can have incredible returns investing in and building $200-$500 million companies. 

My goals this year is to have fun.  I have been looking for, investing in some unique takes on fun, free time, sports and media.  I am excited that Social Leverage has a lot of capital to deploy.  I have been looking for and already investing in some unique founders/companies focused on high end marketplaces and those building fresh, unique experiences and operating systems for entertainment.  I plan on being extra creative around my own content and thinking about the next great media products and companies.

Have a great Friday.