Paul Karger explains how ultra-wealthy families with $100M+ can tolerate illiquidity and take longer time horizons. The same principles work for smaller portfolios, just scaled down: size positions so a loss won't wreck your life, and avoid getting emotionally attached to any single investment.
The major difference with the ultra high net worth, the $100 million plus type families, is because of their significant asset base, they can take on typically significantly more illiquidity. And in the same vein, they can think truly long-term. When you're relating it back to families that may have less money, a lot of the same principles apply, but you just need to size down. Decisions. We don't really want to fall in love with any particular investment, and we want to ensure that everything is well-sized in their life. So it's meaningful enough where it works out and it's a meaningful contributor to performance and your net worth. But if it doesn't work out, it's not going to change your lifestyle and you're not going to be on the park bench. Those are the things that we keep in mind from a macro perspective.
