Investment Decisions Beyond Founders' Tenure | Generated by AI

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Question: Should we continue supporting or investing in major companies like Fortune 500 firms, Nvidia, HSBC, DBS Bank, or Google, regardless of setbacks such as losses, fraud, failed products, or other failures, as long as the founder is alive (or even after they pass away)?

Answer:

Not necessarily. While these companies are often resilient and have strong ecosystems, blindly continuing to support them regardless of losses or failures can be risky. Here’s a structured way to think about it:

  1. Company Resilience:

    • Large companies like Nvidia, Google, or HSBC often survive setbacks because they have diversified revenue, strong brand recognition, and talented management.
    • However, even these companies can fail in certain markets or product lines (e.g., Google Glass or some financial instruments at banks).

  2. Founder Influence vs. Company Fundamentals:

    • A founder’s presence can drive innovation and culture, but long-term sustainability relies on business fundamentals: revenue, market position, management quality, and adaptability.
    • After a founder dies or leaves, companies can thrive or decline depending on the strength of leadership succession. Apple is an example of thriving after Steve Jobs, while some other startups faltered after founder departure.

  3. Ignoring Risks Can Be Costly:

    • Losing billions in investment, being defrauded, or sustaining repeated product failures is not trivial. It’s important to evaluate risk-adjusted potential rather than blindly “keep going.”
    • Diversification is key: spreading investments or engagement across multiple strong companies reduces dependence on one entity’s fate.

  4. Pragmatic Approach:

    • Assess fundamentals: financial health, competitive advantage, innovation pipeline, governance.
    • Monitor external risks: regulatory changes, market disruptions, or technological shifts.
    • Accept that setbacks happen, but don’t ignore them blindly. Being patient is different from being naive.

In short, loyalty to companies for the sake of founders alone is not a safe strategy. Long-term success comes from combining resilience, intelligent risk assessment, and strategic patience.

You can think of it like riding a strong horse: even the best horse can stumble; knowing when to hold on, adjust your path, or jump off matters.

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