On September 11, 2001 I was in the seventh grade. I was home sick from school that day. I remember my mom calling from work and asking me to turn on the TV so she could explain what had happened, some time between when United Airlines Flight 175 hit the South Tower and when both towers collapsed into lower Manhattan.
On September 15, 2008, I was beginning my sophomore year of college at Johns Hopkins. The day that Lehman Brothers filed for Chapter 11 bankruptcy protection I was focused on trying to pass Bruce Hamilton’s Elements of Microeconomics, as the world slid into the Great Recession.
By the time I graduated in 2010 and moved to New York City recovery was in full swing, unleashing a bull market that would last ten more years. Until about a month ago, of course. I am not qualified to opine on how long it will take to recover from the COVID-19 pandemic, or how deep the damage will be. But most people would agree the world will never be the same.
For the first time in my life I am experiencing an economic crisis, not as a child or a college student but as participant in the global economy. Until the past week, I had never stopped to think about my life in the context of economic cycles. I had always been acutely aware of the advantages of my birth, but had never counted timing in the economic cycle among them.
I had never thought about how incredibly different my life would have been if my parents had started a family a few years earlier or a few years later. Warren Buffet talks about the “ovarian lottery,” but even the Oracle of Omaha does not consider the timing of it all.
I sat down to write about timing, but I could only write about luck. Timing suggests agency, while luck just is. Some masters of the universe may have agency in the way they execute investment strategies across market cycles, but most people are not masters of the universe. I certainly am not.
I was lucky to have sold my company a year ago. While still very exposed to this crisis, I know that I am luckier than most.
Realizing that you have been so lucky can sober you up quickly. It is not the kind of luck that when it finds you on the craps table you are eager to throw the die again. For me, it lands like a quiet suggestion that I may have never been as good as I thought I was. I was lucky. I recall the adage attributed to venture capitalist Eugene Kleiner, “in a strong enough wind even a turkey can catch flight.” Am I Kleiner’s turkey? Surely there has been some mistake…
Just as it is tempting when things go well to assume that we are good, it is tempting when things go poorly to assume that others are bad. It is tempting to dust off Hayek and join the hoards on Twitter: “they focused on the wrong things, they spent too much on growth, they should have known better — they deserve it.” Moralizing is even more dangerous than misattribution. In reality some people have just been inexplicably unlucky. Surely nobody deserves Coronavirus.
Though the challenges of startups are modest compared to medical professionals or essential workers, the pain is still real. Term sheets pulled in the eleventh hour, valuations slashed in half, teams disbanded and dreams deferred. A whole generation is learning the difference between a layoff where you can say “it is for the best for everyone,” and a layoff where you part ways knowing that your friends will have to file for unemployment for the first time.
The only silver lining I can offer in looking at the chart above, is that we are all very lucky compared to say someone who was my age 85 years ago. As of today’s open, 89.7% of the value of the S&P Index has been created since my birth (3/22/1989). That is bananas, and it might lead one to conclude that we are all turkeys in the grand arc of history.
