Conventional Wisdom Will Be Wrong
As I read through all of these third quarter letters from various fund and asset managers I am getting, I keep reading the same things. It's time to cut exposures, leave equities for now, expect 2009 earnings estimates to get cut a lot more, you can't buy this market right now, etc, etc. It's amazing to see how everyone is saying the same thing. I even see it in the the comments to my posts on this topic to my post on this topic yesterday.
It's the same thing with VCs and entrepreneurs giving advice (me included). We are all saying the same things. And we are doing that because of the lessons we've learned in prior downturns. Nothing wrong with that.
But I am reminding myself this morning that conventional wisdom will be wrong. It will not play out exactly the way the best fund managers, VCs, and entrepreneurs think it will. I like what Max Levchin said at the venturebeat downturn event:
Don’t listen to anybody. Nobody knows what’s going to happen next … Better to be contrarian in times like these than not.
I'd alter that a bit. Listen to everyone. Read everything you can. And then come to your own conclusions. It is better to be contrarian in times like these. But do it wisely and don't bet the farm.