The Future of Asset Management…The State of Venture Capital…and Goldman Sachs is Spamming me

I have a big brain dump here so I hope you stay with the whole thing…

What a weekend of golf that was…

The Jordan Spieth implosion on hole 12 was the most human golf moment in history. The social era makes it so. His legend will only grow from here. Golf is in good hands.

In my industry (venture capital and asset management) there seems to be no humanity left.

The VC industry is full of bullies with billions. Silicon Valley has never been more grotesque. It has never been as strong either. This quarter was the biggest ever for the Venture industry. Money is flowing and that is all that matters for now.

I am confident that basic money management principles, networks and style (eye) will always be important and full of alpha so I am ignoring the noise and trying hard to compartmentalize the bad actors and behavior. The truth about this boom and the others before it are that the longer they go the more likely you will end up partners with people you would never want to be in business with.

The good news is that a few great VC’s continue to share. Everyone that invests should read this ONE recent post from Fred Wilson. It is full of truthiness.

In the banking world, I believe strongly that we have seen peak Goldman. Goldman Sachs just paid another $5 billion in fines for it’s ‘tactics’ leading up to the financial crisis. A puny fine in to Goldman, but a reminder of why they are moving away from people to machines. Goldman won’t have many humans left in the next 10 years as they replace people with algos and machines. That will make them the most human and caring they have ever been!

As for asset managers and the business of asset management, the biggest changes are underway. In the last month I have received TWO cold emails from Goldman Sachs wealth advisors. Both are weak and borderline spam. I have enclosed one here:

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Goldman wants me as a client. I rest my case on Peak Goldman!

I think we are also at peak robo-advisor. I do believe assets will continue to flow into the category but I have avoided any investment in the companies and closed all my robo accounts. I do not see the value in an algo managing my money unless it is the $SPY ETF and dollar cost averaging. The topic gets deeply discussed in this blog post that Tadas put together.

As for ‘active’ versus ‘passive’…it is hard to ignore this chart:

Fund cos. facing ‘Napster moment’ as money flows into #ETFs. (via @ericbalchunas) $BLK $STT

— Tadas Viskanta (@abnormalreturns) Apr. 7 at 07:02 AM

Our disgust with fees (thank you internet) and the banks (thank you banks) have put this trend in motion. It seems impossible that this trend can end and I would not advise anyone to bet against it, but I believe it is misleading.

This article from Institutional Investor is the best read and the best organized thoughts on how I feel the industry plays out myself. Read it and bookmark it. This paragraph is gold:

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It’s time for more humanity and style in the asset management business.