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Showing posts from April, 2017

The Essentials of Entrepreneurship

I recently attended a board meeting and was asked to share some thoughts on entrepreneurship.  As I did, it dawned on me that these insights, gleaned from 35 years of experiences and observations, might be of some value, and thus have decided to publish them here.

There are several traits that I suppose one would identify as being typical, if not essential, for successful entrepreneurship. You will note that numerous of these are related, if not overlapping.  These include:

The End of The Financial Supercycle

Since I graduated college nearly 35 years ago the yield on the 10-Year U.S. Treasury bond has declined from near 16% to today’s 2%-2.5% trading range level, and this tells an important story. The massive decline in yields on all financial instruments during this period, which I will call a “Financial Supercycle”, and the concurrent expansion of multiples and thus valuations, has led to massive wealth creation which has served to bolster the overall economy by literally infusing trillions of dollars of capital in the form of both found money (gains) and loans (recycled savings). In that same time, the field of finance and investments was red hot, growing dramatically in size and expanding in a multitude of ways, spurred by an abundance of creativity that spawned new ways to borrow and new ways to invest.  Innovations that have been introduced during this time and have heightened and broadened access to capital include entire financial markets such as the junk bond/high yield bond marke…