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Market notes from up above

If the economy were a single business, it would now be a restart, with aspects of a startup, in the post-pandemic world. This is a new form, with new behaviors and results that can be unpredictable. It is different from a recovery, which is a continuation but with an improved trajectory. The following commentary is an atmospheric review of conditions in this context.

Both sides now

The economy is a multi-sided market. Many have tried to build such a platform, and a few have succeeded. To build and scale, and then support a multi-sided market, each of its core components — the sides, the underlying mechanism, the environment that makes the commerce happen — have to come together just so.

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Axios April 6, 2020 — What top CEOs fear

Behavioral recovery

The economic inflection coming up will be at the time of re-opening. It seems to be assumed that when the doors to business start to swing again, there will be a shape — V, U, or L (each letter more or less depicting the growth curve after the hiatus) — dependent on timing and, perhaps, some differences between sectors. This is overly simplistic.

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Axios April 16, 2020 — The coronavirus chain reaction

The guidance of the networks

When there is a disturbance to one part of the network flow, the change is often felt throughout the mesh, with unknown consequences. The magnitude and nature of the disturbance, the density and quality of links, direct or indirect transmissions between nodes and clusters that may be differently conditioned and responsive, the causes and effects that may be circular or reflexive, these and other puzzles can form a butterfly effect, which is essentially a network observation.

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The asset’s optionality

Enterprise value is made up of two elements: the asset and the optionality. The asset is the business everybody knows, and which defines the enterprise in present form, the base. Optionality is the future possibilities, unknown and possibly unknowable.

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WSJ April 14, 2020 — KKR Warns of Damage

The venture filter

The reflexive dynamic between public and private markets in this coming period of the unknown will make for interesting analysis. Private markets have always looked to the public for hints of receptivity and valuation metrics up ahead, as these things may drive liquidity of the initially illiquid long-hold investment. Public markets, in turn, look to the private for hints at coming innovation and disruptive forces that shape consumption and behavioral trends. In essence, each of the two influences and rounds out the other’s perspective.

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Pitchbook download — April 13, 2020

Now the wider lens

Decade, century, or millennium markers are contrived milestones in history, which — unaffiliated with the solar orbits and powers of ten in the number system — isn’t so neatly structured. When we think of decades in the recent past, we assign qualities to each, shaped by events and culture of the period, as though there had been a migration at the precise time, from one room to another, each with a different decor and set of furnishings.

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Axios April 16, 2020

Written by

Investment, finance, strategy, execution in the networked tech economy. https://www.linkedin.com/in/danramsden

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