Comment by ChrisMarshallNY | Hacker News Reader

Comment by ChrisMarshallNY | Hacker News Reader

ChrisMarshallNY

> I would be planning to ride this thing out for at least eighteen months or more.

I'm betting more like three to five years.

I was talking to a friend (another old guy, like me, but really rich, unlike me).

We've both been through at least two recessions (big, nasty ones, with teeth and claws). We realized that there's an entire generation of folks; many running companies, that have never seen a real bear market.

It's likely they are having a shit hemorrhage, right now.

The company I used to work for, was (still is) an over 100-year-old Japanese company. They lasted through a devastating war, a depression, multiple recessions, and were still around. I'm hoping that they stay around. They've made some choices that could be disastrous (I think that sidelining my team was one ;), but not the same kind a lot of companies are making now. Lots of people are leveraged to the hilt. Bad place to be, when the economy starts tanking.

HODL is the word. Live cheaply, so you don't need to cash out in a trough. Don't rely on other people's money, keep debt way down, keep margins high, optimize processes, etc.

Old-fashioned stuff. It worked 100 years ago, and still works today.

Not everything old is bad.

>there's an entire generation of folks; many running companies, that have never seen a real bear market

If anything, this is a problem that is much less bad than it was in previous down markets.

"7% of CEOs were younger than 50 years old at the end of 2018, compared with about 16% at the end of 2009." [0]

"Data on S&P 500 companies measured over the last two decades by executive recruiter Spencer Stuart shows a small but steady increase in the age of the CEO." [1]

[0] https://www.wsj.com/articles/ceos-under-50-are-a-rare-find-i...

[1] https://www.bloomberg.com/news/articles/2021-11-30/twitter-s...

S&P 500 CEO's. That's a very select subset of CEOs. Many large companies aren't public today and this leaves out CEOs of small-to-mid sized businesses.

The number of private companies that are comparable to the size of the ones in the S&P 500 is quite low. [0] If we're talking about macro trends, public co's are much more important than private ones.

Do you have a source for small-to-mid sized businesses having a decreasing average age of CEOs?

[0] Compare the implied ranking based on revenue for https://en.wikipedia.org/wiki/List_of_largest_private_non-go... vs. https://companiesmarketcap.com/usa/largest-american-companie.... There are only 14 private companies with more revenue than Visa, the 100th-largest public co by revenue. Cargill, the largest US private co, wouldn't even break the top 20 when compared to publics.

>We realized that there's an entire generation of folks; many running companies, that have never seen a real bear market.

This is true for every recession, so maybe rethink your friends logic.

That's exactly what people said back in 2008. "It happened in part because most of these finance people weren't around to experience the dot-com crash in 2000".

We live in a competitive world where organisms (including companies) need to take advantage of every edge they can to out-compete their peers. If they don't, they risk getting left behind or being devoured by their competitors.

Taking advantage of near zero interest cash to grow like crazy is one of those. If you don't, your competitors will. Kind of a game theory situation.

Sometimes, things don't work out for individual organisms. But in aggregate, the ones that through luck and/or foresight manage to make the in hindsight correct decisions emerge as winners.

How could there be a whole generation of CEOs who never saw a recession? Are there 13-year-old CEOs?

As CEOs (also, the 2008 recession didn't hit the tech sector nearly as hard as this one. The 2000 bubble burst would be a better comparison). When you have that job, the priorities are vastly different from as a W2 earner.

But, to be fair, there's plenty that have.

Which is why we're so puzzled at their behavior.

I would imagine ChrisMarshallNY means they weren't running companies when the last recession hit, not that they literally weren't alive....

Recessions don't always hit you so hard if you're not an adult with a career and bills.

I was a kid, in the 1970s, when things were really bad. I didn't notice it, but my parents sure did.

I’m 32. I graduated high school in 2008. I didn’t know a recession happened at the time. My family was already relatively poor, living in a somewhat rural area, so it didn’t really impact us. So I’ve technically lived through a recession, even as an “adult” (18), but a recession now would be entirely different for me.

during the 2008 recession I was too busy playing Runescape

What was wrong with you? Weren't you aware that a D&D MMO was available? Shame on you. It's free now, so stop what you're doing, roll an Artificer & grab a rune arm, take some initiative and go find yourself a Beholder to kill.

If you want to be traditional a then a fighter, thief or wizard is fine too, but roll something.

Graduate college in mid 2008 and will mostly look like the economy has only even gone up for your entire 14 year career. If you were smart though you'd at least be familiar with the concept of cyclical downturns and maybe plan for it, though lots of people have a hard time tightening their belt when times are good.

Not saying I disagree with you, but this comment feels like it's affected by survivorship bias[0]

[0]: https://en.wikipedia.org/wiki/Survivorship_bias

That is roughly how I see it.

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