The Second Bounce of the Ball

During the New Year holidays I read the book titled The Second Bounce of the Ball written by Ronald Cohen. Ronald founded and built Apax Partners into the largest global private equity firm.

In this book he has summarized his experience with successful investing in private companies. The book contains a wealth of advice that is just as useful for (potential) private equity investors as it is for entrepreneurs who want to build their own successful business.

The title of the book refers to a quality/attitude that according to Cohen is essential to become really successful. As he puts it "Everyone can see the first bounce of the ball. It is the second bounce that is uncertain".
If you position yourself to take advantage of that uncertainty (the second bounce), you'll get ahead of the pack.

Thanks for the review. Does the author mention what things are needed to identify that second bounce? What type of indicators, behaviors, etc he has used to take advantage of that uncertainty?

I am curious what people think the second bounce of the real estate bubble ball will be. There has to be an upside besides cheaper properties. I just have not seen it yet.

The author does not provide "how to" tips for predicting the second bounce. According to him the key is to put lots of efforts into knowing and understanding your market. You have to be able to distinguish between the long term trend and the (shorter term) cycles in your market and to predict changes in the trend or cycle. The second bounce usually follows a change in the trend or the cycle.

He gives some examples of where Apax (through one of their holdings) took advantage of a second bounce, but he also indicates that Apax missed a second bounce in their own industry (the private equity industry) by not getting into hedge funds.

Good point, Kurt. There will be a second bounce of the RE bubble ball. It might be an idea to start doing some structured scenario thinking in trying to figure out what kind of opportunity that could create.