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A Surprising Silver Lining

A Surprising Silver Lining

Unless we recognize “Something has died, and something new is coming after it,” it could take until 2040 before humanity emerges from the aftermath of this pandemic.

That comes from Tom Baruch, a prolific “clean tech” venture capitalist who has led investments resulting in 18 IPOs and 8 M&A transactions and now operates from his family office, Baruch Future Ventures.

He was our token optimist on this episode of Free Money, which was recorded on May 15th. But his outlook didn’t take the shape that one might expect. As an introduction, he offered “I believe this is going to last awhile. I don’t see us bouncing back until 2023 or 2024…. I don’t believe that the world [we used to live in] is going to come back.”

Our mouths hung agape as he talked.

But then he started describing a future that doesn’t sound so bad. His belief that, thanks to technology, “we’re entering a period of free clean water, free energy, and free protein” is beyond provocative. It brings to mind the world of Star Trek, where scarcity has altogether ceased to exist.

Tom thinks we can get there soon.

“People used to think that to really effect the kind of change we’re talking about it’ll take 20 years, you have all these scaling issues. And it’s all true. But now we have tools that we’ve never had before.” That means “It’s not gonna be a 20 year deal. we can do it in 10 years.”

That sounds pretty good. But of course Tom isn’t saying it’s a guaranteed outcome. What scares him is that “the government - especially our current government - is gonna try and prop up broken old Industries. So we’re not going to add to GNP. That’s the problem. The way to add to GNP is free energy, free food, free water. That way we’ll build a very prosperous society.”

Tom describes some of what’s needed to accomplish his vision in a recent paper on Medium, but the best way to access his imagination is by listening to this conversation and looking through his portfolio. He blends optimism and pessimism together in a way that can’t help but open your mind.

We also answered three questions from listeners at the end of the show. This week we discussed:

  • Why exactly is it bad that PE funds don't get marked down during a selloff?

  • CalPERS caught some flak recently for unwinding a tail hedge program literally right before the market fell off a cliff. Was that bad luck or a bad decision?

  • There is a fairly significant movement to cancel rent, which sounds pretty good. Would that create long-term consequences that are actually...bad? 

And as a bonus, here’s Sloane’s wipeout compilation from the 2020 ski season, which she mentioned in the introduction.

Free Money
Free Money with Sloane and Ashby
Sloane Ortel and Ashby Monk explore what's holding the world back from investing in progress, answer the questions on the minds of people in the know, and deliver the Brooklyn-Bay Area consensus about institutional investing that you desperately crave.
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Sloane Ortel