Comment by fortran77 | Hacker News Reader

Comment by fortran77 | Hacker News Reader

There will always be charismatic snake-oil salesmen, who may even be a little psychopathic.

The real problem is the people who follow them, validate them, and throw money at them. Big names who sit on their boards, etc.

At least in Neumann's case, the only thing that happened was some rich people lost their money. There were probably no pension funds, etc, investing in him. And their product didn't hurt anyone.

It's easy to quickly think that "if you're a 6'5" good looking man with great hair you can get away with anything", but people also wanted to believe in Elizabeth Holmes.

To me Elizabeth's Holmes case was even scarier: Investors wanted to believe in a "female Steve Jobs" so much that people were getting bogus medical tests. "Real people" -- not just wealthy investors who should be prepared to lose money -- got hurt.

And unlike the NY Times editors, it doesn't bother me that Adam Neumann walked away with $1 Billion. It doesn't hurt me at all, and it certainly doesn't occur to me that this money should somehow be redistributed to more "worthy" people. It's odd for an uninvolved spectator to feel bitter about this.

Notice that the Times was gushing about Theranos until the Wall Street Journal called them out, but they were skeptical about WeWork from the beginning. One played into their preferred narrative, one didn't.

It’s entirely possible that pensions had some dollars wrapped up in WeWork but I don’t have inside knowledge or anything, they just have a decent backplane of institutional investors. But you can’t take this view that every failed investment “hurt” people. Some investments outperform expectations, some you nail, and some are big dumpster fires. A lot of this seems tied up in the myth that everyone knows what they’re doing: they don’t, grand majority of people are winging it to various degrees most of the time.

Can/do pension funds invest in private companies? Seriously asking.

Edit: I don't understand why this would get downvoted, and I am endlessly amazed by how weird or sensitive people are on HN. Just to downvote without even answering a simple fucking question in earnest.

I think "seriously asking" actually ends up making your comment seem ruder rather than nicer. The phrase has taken the same loop as "literally", unfortunately.

To answer the question, they do. Many pension funds manage billions of dollars, so they're at the scale where complex investments like that start to make sense. Even when they don't directly do it, very large private companies like WeWork often start getting included in mutual funds.

Fair enough, might have been better to leave out those words completely.

I also thought about writing an entire sentence on it, such as, "I am asking this in earnest, not trying to make some point in a debate with a rhetorical question." But then I thought it would be too much.

It's definitely a hard balance to strike.

xD I don’t know either but I did my best to make you whole on needless downvoting.

But yes, pension funds do invest in private companies in a few ways. Some of it is relatively recent. They absolutely will invest during the “road show” of pre-ipo companies, but I’ve also seen numbers like up to 20% of vc funds coming from public pension funds [1]. It’s actually kinda a great idea imo, they’re definitely not betting the farm on these companies, and it’s a great way to get further diversification on an asset class that probably moves differently from other asset classes. They’ve also branched into things like real estate trusts, another kind of diversification that moves off-cycle from other asset classes.

[1] https://www.quora.com/Whats-the-relationship-between-pension...

Thanks! Solid answer/source too, I appreciate it.

Yes they do sometimes.

This is an important (and unsettling) realization. I find this to be true of many "superstar"-type folks.

"it doesn't hurt me" is a formula for hurting everyone.

You should care that society functions well, even if the parts that don't aren't the parts you are involved in.

It wasn't that "it didn't hurt me." It was that it didn't hurt _anyone_! I didn't like Theranos because it hurt people even though it didn't hurt me.

And perhaps foolish investors learning a lesson is part of a well-functioning society.

Didn't hurt anyone? Misallocation of capital leads to people taking jobs that are unsupportable, and pushes out firms that potentially could have done a better job.

>It doesn't hurt me at all, and it certainly doesn't occur to me that this money should somehow be redistributed to more "worthy" people. It's odd for an uninvolved spectator to feel bitter about this.

What about the employees he screwed over and are getting laid off without severance?

And unlike the NY Times editors, it doesn't bother me that Adam Neumann walked away with $1 Billion

Remember that the goal of the scam was to offload it to retail investors at a $47Bn valuation knowing it was not worth even a fraction. They were stopped but that doesn’t excuse them of the conspiracy. And they will surely try again.

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