6 thoughts on “Jargon Alert”

  1. What Is the Barbell Strategy?

    The barbell strategy is an investment concept that suggests that the best way to strike a balance between reward and risk is to invest in the two extremes of high risk and no risk assets while avoiding middle-of-the-road choices.

    All investing strategies involve seeking the best return on investment that is possible given the degree of risk that the investor can tolerate. Investors who follow the barbell strategy insist that the way to achieve that is to go to extremes.

    • That makes sense, D, but the guy speaking in the interview is a tech venture capitalist.

      My understanding of the behavior of this group is that no risk isn’t part of their usual investing strategy. But my understanding may be outdated.

      • That is still current.
        In the tech world reward is tied to risk. Low risk is associated with “me too” projects. Less desirable. There is less value in being the second or third player in a market. And zero value if the market is within reach of the likes of Microsoft, Apple, or Amazon.
        The typical technology Venture capital firm makes a lot of First Round investments. After a while, the more promising ones get second, third, or even further rounds.
        Early round losers are write-offs, against taxes if possible.
        Latter round disappointments they tend to sell off to the bigger companies, often to be dismantled.

  2. I found what appears to be a more complete quote:
    “The thing I’ve tried to do the last few years is really “barbell” the inputs. I basically read things that are either up to this minute or things that are timeless….”

    If that’s the quote, my take is that they are trying to say that they only give importance to or pay attention to either up-to-date and current information (what’s happening right now) or the timeless principles of the information. They ignore everything in the middle – specifics of anything that isn’t current.

    So, the picture is that the two important parts (weighty bits?) are at either end of the barbell and you can basically ignore the middle. Of course, the phrase doesn’t say anything about how to figure out what the timeless principles are and that is the part that really matters. If you can’t identify them, then how are you going to only read them?

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