Making acquisitions that are both meaningful and sensible is now more difficult than it has been during most of our years
This is a key dynamic that helps keep the business and investment world fresh: any investor or business manager who is successful at small scale will rapidly find herself running more and more money, or a bigger and bigger business, until all of a sudden the kind of opportunities that she exploited to become successful are now too small for her to bother with. So a new set of investors and managers come along to exploit those opportunities, and the cycle repeats.
This also leads to an interesting outcome in some cases, where investors who have great long-term performance track records expressed in annual percentage returns can actually be net destroyers of capital. Imagine the hedge fund manager who starts by managing $50 million and generating 30% gains for several years. Then large institutions notice his performance and give him $10 billion to manage, then he has a 30% down year, like in the 2008 financial crisis, and wipes out $3 billion of investor capital — more than all the dollar profit he has ever generated.
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