The disparity between the number of companies/mgmts/boards that BELIEVE they have earned the right to invest ~undisturbed through a slowdown, vs the number that have actually earned that right, is astounding

At a BARE MINIMUM, if you have sufficient scale (call it many billions in bookings or GMV or revs) but aren’t self-funding, you haven’t earned that right

But it goes beyond that. If you haven’t showcased repeatable growth in FCF, you probably haven’t earned that right either.

There’s more. If that FCF growth rests on the necessity of diluting the life out of your shareholders via SBC to keep the lights on, you haven’t earned the right.

FCF. Per share. Growth. Through at least one cycle. That’s what earns you the right. Of the companies with their heads in the sand, very few meet these criteria.

All of this presumes your balance sheet is tight. Godspeed if you’re walking a tightrope.

There are repercussions to swimming naked. Markets and competitive conditions always force companies’ hands eventually. They will have to wake up to pragmatism or die fighting a pointless battle of ideology.

The pretenders are falling prey to survivorship bias. They’re going to ruin their prospects in the process.