Private investment firms like venture capital and private equity are in the business of avoiding visible volatility of public markets. Because private assets don’t trade and investment managers go to great lengths to keep them from going down, assets appear to mostly appreciate (there are down rounds and losses, sometimes the chicken comes home to roost, but for the most part this is true) even when public markets are tanking.
From Matt Levine, Money Stuff.
See also:
- Private investing is a tournament like fields with asymetric and convex payouts favor high-variance strategies, but the variance is largely invisible
- Consensus macro forecasts provide no value