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Comment by samhw | Hacker News Reader

This seems to amount to "pick fantastically successful businesspeople to invest in, before the market has priced in their fantasticness". Obviously that would be successful if you can do it, but it's predicated on your being smarter than anyone else in the market, which is ... unlikely.

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You're not wrong with the description, although I would counter that you don't have to be smarter than anyone else - even if just a fraction of people is undervaluing an asset, you can still make a profit.

I think Elon is a good example of that - a lot of coverage in the past years focused on missed production numbers and that sent his reputation into a tailspin. But anyone who actually bought and drove a Tesla knew that the cars were ahead of their time and that the rest of the country would eventually catch on.

I guess it depends on the average relative valuation (i.e. are more people undervaluing that person to a greater degree than those overvaluing them?). But this also seems to depend on some kind of great man theory of business history. Plenty of people smarter than Jobs or Gates have failed, just due to the vicissitudes of life, if nothing else.

That average relative valuation is a good way to think about it. I would propose that most people don't believe in the exponential potential of individuals, so you'll find that people undervaluing the top CEOs outweigh those overvaluing them.

Yeah, I definitely agree to some extent. I've worked with enough people like this to know that there are 100x engineers, and 100x CEOs, and so forth. But I wouldn't assume that every 100x CEO succeeds. It's a contributing factor, but luck still plays an outsize part.

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