Watching DoorDash and Airbnb go public this week, brought home how much markets have changed from the 90s.
Big deals are up 1,000-fold in 40 years.
I graduated university in early 1990s, and was born in the late 1960s => part of the first generation to come of age after the very inflationary 70s.
The mentors, and wise-old-men, of my early career had been heavily influenced by their experience with price-inflation. In turn, when those vets had been young stallions, they were influenced by survivors of the Great Depression.
I received a very conservative financial education.

These days we’re told we don’t have enough inflation.
I’m not sure about that => the price to buy $1 of cash flow has skyrocketed.
I’ll post the last 40 years of price inflation below.

Watching Airbnb/DoorDash/Bitcoin/Tesla, and looking at luxury real estate, I see inflation at work, but differently.
Inflation is not necessarily a bad thing – there’s never been a better time to be world-class at solving problems for people. More on that later.
I see a tsunami of money.

At market tops, it is easy to find people congratulating themselves for their vision. A favorite quote (from a very successful friend of the family) is “some see, others saw.”
Something I failed to see, when I was on the inside, was the benefit received from:
- The global money tsunami
- Constantly dropping long term rates (the current 30-year rate implies a PE ratio over 50x)
- Increasing investor allocations to our sector
Add non-recourse leverage, ring fence the deals/funds and there was no way to lose.
Of course, we didn’t see it that way => we were smart, we worked hard and we were visionaries.
Now, I’m not so sure.
Tomorrow => what this era might mean for my kids, effectively, two generations behind me.
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