How the US Is Attracting Capital Back
The venture capital market has fallen quiet.
When long-term returns exceed short-term returns, investors will always invest—because the spread between long-term returns and short-term cost of capital represents corporate valuations and P/E ratios. With P/E ratios this high and future costs this steep, if I don't invest, am I a fool?
This aging, declining domestic U.S. market can never win capital's favor—there is nothing more appealing than emerging markets.
To reverse all of this, the only play is to maintain an inverted yield curve. If long-term returns fall below short-term funding costs, if I tell you that future gains pale against present ones, who would invest?
I can't outrun you, so I'll freeze time and slow the pace.
If I'm not moving forward, neither are you—we both go in slow motion, so that your pursuit of me naturally decelerates too.
