Josh Wolfe from Lux shares his redacted Quarterly Report

There is a ton in this. I will have to sit and read all the docs.

Full thread in the post!

1/ Releasing a redacted Lux quarterly letter to LPs.

Some strong views of
-a catalog of an excess of excesses
-what catalysts cause the current market frenzy to end
(preview: LP indigestion)
-what we are advising our Lux family companies
-much more…

2/-The importance of HEIGHTENED HUMILITY in times like these (where source of ‘success’ can be easily mistaken)
-Telepresence helps us connect with far-flung founders but true presence (in person) helps our team connect like never before
-Where a CONSENSUS of CONCERNS is CENTERED

3/ Time travel with us a year hence—
reflecting back on the year that was.

Which of the 2 paragraphs below do you expect to read in Q3 2022?

4/-Is now time for CAUTION or throwing CAUTION to the wind?

-Valuations have risen
diligence fallen &
EXCESS is in EXCESS

-Preparing for the turn—when it comes
is wiser than predicting—when it may

5/ An excess of excesses—or what things wicked may this way come…

As Fed + central banks dole out dramatic distortion of discount rates, duration and the “true” cost of capital into markets…

A scene from ‘Deadwood’ comes to mind…

6/
-In just the last 12 weeks, startups raised more than the entire 99-00 .com boom/bust

-Character is built thru hardship + steep slopes
Yet today’s hero’s journey has given way to flattened slopes

-Thus far all news has been good news—which to realists—portends bad news.

7/ Failures comes from a failure to imagine failure

Good times let guards down
making co’s vulnerable to the silent artillery of time

LP’s whiteboard of GPs coming to market
looks like A Beautiful Mind

indigenstion of LPs + pace of new commitments
cant match pace of new raises

8/…before continuing…

ht @TheRealCarlChi1 for the image of investor swim lanes then + now

9/ The “Hemingway Hinge”…

A few funds with AUM $50-100B taking page from Carlyle,Apollo, KKR + now TPG will…
turn once cultivated intimate partnerships
into calculated intentions to go public becoming institutional corporations, fully diversified supermarkets

10/

-We have benefited from unusual demand—just as we caution against its unlikely persistence in its current form.

-we said 90% of SPACs would be CRAPs

-Some deals will prove…less kosher than a kilebasa sausage smothered in swiss cheese

-The Appointment in Samarra…

11/ Indefinitely Modified Paths—the wisdom of William James & Jurassic Park.

“Life finds a way”… and so do incredible founders
in every cutting-edge industry we find + fund…

12/
Space race is real—over 12 nations have astral aspirations
took humanity til 1961 to launch 1st 👨‍🚀 in space
last mo there were 14 in space @ same time

Do wise things when others are doing provably foolish things
And do what may appear to be foolish that’ll prove to be wise

Originally tweeted by Josh Wolfe (@wolfejosh) on November 14, 2021.