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So along those lines, there are some venture firms that don’t really seem to care a lot about valuations and others seem to focus on a little bit. Is valuation significant, or is it, hey, we’re going to make 100 investments and if two or three workout, the valuations are irrelevant? How do you fall in that spectrum?
00:03:14 [Mike Greene] So that was actually an outgrowth from my experience coming out of Wharton and you mentioned the, the, you know, the transition of people who tended to be skilled at math or physics into finance. We built a company that was focused on valuation, initially, actually targeting corporate strategic planning departments.
Background Since January 1, 2010, all individuals, regardless of income levels, have been able to convert existing retirement accounts such as traditional IRAs into Roth IRAs. In such a case, one could reverse the taxes that one had paid based on a much higher account valuation, and re-establish the account as a traditional IRA once again.
Since January 1, 2010, all individuals, regardless of income levels, have been able to convert existing retirement accounts such as traditional IRAs into Roth IRAs. In such a case, one could reverse the taxes that one had paid based on a much higher account valuation, and re-establish the account as a traditional IRA once again.
And I did the math, and I think at that point in time, roughly speaking, assets in ETS were roughly just 10 percent, 12 percent of assets in mutual funds and I was pretty convinced that that number was to increase significantly. I mean, when I was in Chicago, one of my best experiences in Chicago was when Spain won the World Cup in 2010.
SEIDES: But market returns across — RITHOLTZ: The past decade, 2010 to 2020, we were what? So I think that argument is very valid in those couple of years, 2009, 2010 probably, maybe 2011, which was a tough year for hedge funds. What’s the valuation? RITHOLTZ: Oh no, it’s much worse. SEIDES: It’s lower.
In other words, a lot of the gains we’ve seen in the 2010s, and I would guess ’21 and ’22, weren’t so much based on that multiple end of earnings but future multiples that were pulled forward into that time period. Explain that. And so, then in the book, I was saying that I don’t really have a strong view on this one.
Jeffrey Sherman : Well, what it was was, so I, as I said, with applications, there’s many applications of math, and the usually obvious one is physics. Barry Ritholtz : It seems that some people are math people and some people are not. The, the math came easier. And I really hated physics, really. It’s so true.
But thankfully, the next decade, things really accelerated in terms of the growth of the company and growth in the valuation, things like that. The math never seems to work out. You join the Giving Pledge in 2010. We’ve been at it for coming on a decade, had only a couple 100,000 customers.
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