I was emailing with my friend Harry this past week and we started talking about crypto and the inevitability of a massive crash. I am certain the big crash will happen. I don’t know when it will happen and I think it may be some time before it does. But better safe than sorry. So I’m going to write some thoughts about how to survive it.
I told Harry my personal story of having 90% of our net worth go up in smoke in the dot com bubble and crash.
The only reason it was not 100% was that we owned two significant pieces of real estate that were about 10% of our net worth before the crash and became our entire net worth after the crash.
We were not diversified. We had all of our money in venture capital and internet stocks and had ridden that wave all the
I remember when I was in my early 20s and just starting out in the venture capital business, I came across an old wall street saying that “a market climbs a wall of worry.” I didn’t understand it and that made me want to. I read a bit about the saying and came to understand that bull markets require an uneasy feeling.
Worrying is a fundamental characteristic of most investors I know. Greed and fear are the two opposing elements of market forces.
I read a board deck this weekend from a portfolio company that is absolutely crushing it and forwarded it to our team at USV with a short memo outlining all of the risks I am worried about. Not a single enthusiastic comment was in that email.
Why is that? Because although we invest on “what could go right”, we manage our investments on “what might go