Greycroft chairman Alan Patricof said Thursday the recent market pullback was a “blip” and that investors should remain calm.
“This is a blip, and we’ve seen a lot of blips in the last 20 years,” Patricof said on CNBC’s “Closing Bell.”
Stocks sold off dramatically again on Thursday, continuing a volatile period of trading that has pulled the major U.S. indexes into correction territory, meaning they are at least 10% below recent highs.
Patricof and Greycroft specialize in private investments in smaller companies, and his current investments include media companies Axios and Wondery. Though those private stakes aren’t as volatile as public holdings, Patricof said he hasn’t been actively trimming his personal stock positions.
“I certainly haven’t sold any stock I own in the past several weeks,” Patricof said.
He said that he thought the political situation would help the market settle down. Patricof is a supporter of former Vice President Joe Biden, whose performance on Super Tuesday vaulted him back to front-runner status in the Democratic primary race.
Patricof said investors should avoid being active traders during this volatile period and trust their prior valuations of companies.
“I learned a long time ago from a very astute person in the market, and he said if you love a stock and you really know the fundamentals, if it goes down 50% you should love it twice as much. And that concept has stuck with me for a long time,” Patricof said.
When asked about the memo rival venture firm Sequoia sent to its companies about the coronavirus outbreak, calling it “the black swan of 2020,” Patricof said his firm was reinforcing what it regularly says to its companies.
“Right now, you should make sure your balance sheet’s in good shape, have cash in the bank and keep your head count tight. But I think you have to look at a long-range basis,” Patricof said.
Greycroft’s potential exits from investments through acquisitions haven’t been impacted by the market turmoil so far, Patricof said, but he thinks private companies would have a hard time to going public before things calm down.
“To come out into this environment, you’ve got to be pretty gutsy,” Patricof said.