In private equity, investors sign up for ten year funds, often with the possibility of being extended for another two or three after that. Investments are made in the first four or five years and harvested in the latter years. Since the investments do not trade, its often difficult to tell, even three or four years into the life of a fund, whether or not your initial decision was right.
How does that compare to your own life? How long before you know whether or not your decisions were right? Can you ever really know? Job decisions seem to have a somewhat short payback to them. I think you often realize within the first few months whether or not you joined the right firm and its going to work out. Decisions to go out and party? Those have an even shorter feedback loop. You know the next morning whether or not you should have gone out the night before.
What about relationships? My friend's grandparents got divorced last year after over 50 years of marriage. Is that how long it takes to get viable results on a relationship decision? I think the tough part is, you never really know, and if you think you know, you're missing a lot of deals and just glossing over a lot of the intricacies. I used to have this idealistic conception that when you find the right person, you just know... and that was comforting, because then you didn't have to get caught in this gnawing uncertainty of whether you were with the right person. Something would come along and be clear-cut--obvious through its completeness. Sometimes, to further complicate things, you make the right decisions, but you're just not the right person to carry them out. Did a relationship fail on its own or fail because of you? Right decision, bad execution? The worst part is, you never really get the answer to whether or not you made the right call. You can become more or less certain about that decision, but there's no way to really ever be sure---too many variables. And that's why I think we're so nostolgic about relationships. We need to constantly sift through our past as not only a reference point, but as a study of our own behavior. Are we messing things up or has chance not favored us?
I got to do a lot of thinking about this over the weekend, and I have to say, to be honest, I have the track record of a good train wreck. I think perhaps it would be best for me not to invest in this part of the CEOCorp business because it may not be one of our core competencies and may be in need of a restructuring.