Will the best companies choose to stay private and still be liquid, or will they always want to go public and be in the public markets?

I am a firm believer of the first point, that the best companies will choose to remain private and will tend to be privately traded hybrid organizations. Let me take a step back. The reason most companies want to go public, or the reason why companies wanted to go public or want to go public, is because of accountability and access to capital markets. 

If you remove the access to capital markets barrier and say, there's enough access to capital in the secondary markets or in the private markets, the only other reason why you want to go public is if you want to have greater accountability to your investors. And that's fine. But greater accountability also comes at a price, which is short termism, right? Because you, as a public company, will have to report every quarter, as in the US, or every six months, as it is in certain European countries. And that tends to put a tremendous amount of pressure to the management team to deliver results quarter after quarter. And that also tends to make them oftentimes make decisions which are not really conducive for the company or for the investors. 

Stock buybacks is one example. The pressure to create growth in the company oftentimes makes companies buy back their stocks over time by taking advantage of zero rates that have existed in the world for the last decade or so. Is that good? I really don't think so.

Because you can be a loss making company, you can have terrible unit economics, you can have terrible culture, terrible -- actually, I wouldn't say terribly, I would say relatively bad, terrible is a bad example here -- and still your stock may go up because you've just chosen to buyback your stock over time.

And one example I'll give you here as a private hybrid organization -- and this is truly an asset class that I think you guys should really write about too in my opinion -- is how the biggest family owned enterprises manage their companies. So there are lots of public companies in the world where the majority of the stock is still owned by the founding family or the controlling family. They operate very differently because they're thinking in generational terms, they're thinking legacy terms. They're thinking in a 30 to 50 year horizon, they're not thinking of the next quarter. And if you observe very closely on how those companies trade and how those companies behave during times of bull markets and bear markets, that should give you an extremely good cue of how privately traded hybrid corporations that are high quality should trade in the long run.

And that I can tell you to a large degree of confidence is going to be very different to how a company that is obliged by law to report every quarter. Their decision function is going to be very different.

So I do see this world where you will have the privately traded corporation and the creme de la creme and the best of the best of the companies will evolve into that top of the triangle. And as a result of that, by definition, over time, you will have this negative selection going away.

And hence the majority of capital that is ready to be deployed in private markets will go to those companies, hence further fueling their growth. Did I paint a good picture there or did I over dream?