Last week I wrote a longer post called “Make the time to be more than a hedgehog” which referenced the work of Phillip Tetlock on “superforecasting” and how those who range widely in their thinking and areas of expertise and focus (foxes) seem to be able to forecast more accurately than those who are very deep in one area of expertise (hedgehogs). I also referenced my own background in assessing businesses and that, for reasons explained in that post, “I don’t normally even need to review the financial statements anymore” to make an assessment.
One example where I did review the financial information deeply after having had various (“fox” thinking) “flags” raised, was over four years ago when I wrote: “WeWork and remembering lessons of the past“. This was the second of two posts at that time where I strongly made my case that WeWork was radically overvalued. I guess my starting point was “Community adjusted EBITDA”, so then I dove into their financials and it got worse the deeper I got.
So, just over four years later, I saw this in Reuters:
“WeWork shares have fallen about 87% so far this year. The flexible work provider, which was valued at $47 billion in 2019, now has a market capital of $404.7 million as of last close.”
Folks, that is a more than 99% fall in valuation since I wrote that post in April 2019.
I am definitely a “fox” thinker, and sometimes I get forecasts right (and sometimes wrong), but in the aggregate, my “fox-ness” means I tend to have a good sense of things.
So, what is my crystal ball telling me right now?
Well, it depends on what area you ask me about, but I can tell you that I love Crowdfunding platforms and currently have about 25 holdings in scale-up companies across sectors as diverse as:
- energy storage via dropping heavy weights down mineshafts
- sunglasses
- local venue development on brown sites
- deployment of brands for food delivery via existing restaurant kitchens
- hair supply for black women
- low VOC paints
- mobile massages
Diverse, yet all of them feel to me that they meet a need, have solid financial models, strong leadership, and are run ethically. Oh, and only two have gone bust in my five years or so of building this portfolio, and currently it has an overall return of… well, enough about me, the point is that I rate highly the idea of fox thinking. Oh, and of backing yourself. I wish I’d “shorted” WeWork 😉