Reading catchup

Trying something a little different this week. A roundup of selected readings I came across recently. Click the title of each section for a link to the source.

People are worried about Blue Owl liquidity

Matt Levine has a way of cutting through the finance industry’s bullshit in a very lighthearted way.

As long as it’s not your money being lost or locked up in a private fund, it’s a fun read. As Homer Simpson was known to say, “it’s funny because it’s true.”

If you run an investing business, your main, existential job is to keep your clients’ money. One way to do this is by having consistently great returns, so your clients always want you to invest as much of their money as possible. That feels great, and if you can do it more power to you, but it doesn’t always work.

The other way to do it is structural: When times are good, you set up your investment vehicle in such a way that, if times get bad, you can keep the money. When times get bad, this approach doesn’t feel good. It is not fun when your clients complain about you on the front page of the Wall Street Journal. But your existential job, as an investment manager, is not to feel good. It’s to keep the money. And you can control your lockup terms more reliably than you can control your performance.

Private credit is in the middle of a giant push to manage trillions of dollars of retail money, and this is not exactly helpful for that effort. Logically or not, retail investors do want liquidity, and very public liquidity hiccups are bad for business. “The timing is especially awkward because Wall Street is rushing to bring private assets to the masses,” adds Markets Daily. “Trying to convince 401(k) retirement plans to add such funds gets tougher when investors are blocked from exiting.”

Once Wall Street’s High Flyer, Private Equity Loses Its Luster

For the past several years, private equity’s annual returns have been lower than the S&P 500’s.

Between 2022 and Sept. 30, 2025, U.S. private-equity firms have generated annualized returns of 5.8 percent, including investors’ fees. The S&P 500 generated 11.6 percent annualized returns over that same time period, according to the most recently available data from MSCI, a research firm.

And until the companies are actually sold or taken public, a private equity firm’s returns are only estimates of how their companies should be valued. Some investors are growing concerned that they are being left in the dark about the true value of their investments with these firms.

Is it possible to invest ethically?

Great piece by Ally Jane Ayers that very much reflects my own beliefs around “ethical” investing.

Ethical investing does provide a benefit. It just isn’t a public one. It makes the investor feel good. It offers a sense of moral cleanliness and personal alignment. You get to look at your portfolio and feel like it reflects your values.

There’s nothing wrong with that, but we should be honest about what’s happening. The primary beneficiary of ethical investing, at least at this scale, is the person holding the portfolio. The personal satisfaction is real. The impact largely is not.

If you fundamentally cannot stomach investing in a large corporation because of ethical concerns, you should at least be honest about how deeply entangled these companies are in everyday life. Take a company like Procter & Gamble or Chevron. If you buy almost anything from a drugstore, you’re almost certainly giving money to P&G. If you drive a car and buy motor oil, you’re very likely supporting Chevron. Avoiding them entirely is close to impossible unless you opt out of modern life altogether.

At that point, refusing to invest in them doesn’t meaningfully change your ethical footprint—it just limits your own ability to build long-term wealth. You’re still participating as a consumer, just without the upside of ownership.

You only have to get rich once

In Low Risk Rules, I wrote:

Let’s use the example of Masayoshi Son, head of Japanese firm SoftBank, who has tech investments around the globe. A New Yorker article quoted a former SoftBank executive as saying, “Venture capital has become a lottery. Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”

The idea was that venture capital and angel investing, generally, are nothing more than fancy lotteries for tech visionaries.

In this piece, Young Money by Jack Raines kicks off his essay by examining Son’s investment record as follows:

The ironic part about Son’s journey is that, despite the hundreds of billions of dollars that his company has gained and lost over the last 24 years, his net worth is still only $30 billion, or less than halfway back to his peak net worth. He would have been much, much richer had he exited the game in 1999 than he is now after spending 24 more years investing.

Lots of good stuff here, and it’s not really about Masa at all.

Why is it so hard to hold on to the money we made? Because hitting a home run on an investment is euphoric. And beyond the dopamine rush, it strokes your ego, making you feel smart. Those good feelings cloud your judgement.

Financial returns are a seductive feedback mechanism. When something you invest in goes up by a lot, you feel like a genius, and you want to experience that rush again. And because your last bet was correct, you grow more confident, so you decide to double down on another trade. Maybe that investment works out as well, so you repeat the process again. Positive reinforcement in the form of financial compensation is one hell of a drug.

Now, this essay was written in late 2024 (and I’m just getting to it now….) so some of the investment references are a bit dated (particularly his comment that “if you owned stocks (like, literally, any stocks) or crypto (like, literally any crypto) over the last couple of months, you’ve made money.” But let that be a lesson that when you read comments like that, the end is often near! I feel like this essay actually reads better with the benefit of hindsight, knowing that many of the massive crypto and tech winners he wrote about have been taken out back and shot.

Why Do Investors Play Low Probability Games?

We seem inexplicably drawn towards activities – such as timing the short-term fluctuations of markets or taking aggressive, concentrated bets – where the chances of positive outcomes are poor, yet we carry on regardless. Why can’t we resist playing what seem like the wrong games?

It’s short. Read the whole thing!

Read more books

This focused attention actively shifts your autonomic nervous system from the sympathetic “fight-or-flight” state toward the parasympathetic “rest-and-digest” state. As this happens, you experience measurable physiological changes: your heart rate slows, your breathing deepens and becomes more regular, and your muscle tension decreases.

Reading represents one of our most sophisticated yet accessible tools for nervous system regulation. In an age of constant stimulation and fragmented attention, books offer something incredibly valuable: an activity that simultaneously stimulates your brain and calms your body.