Private Equity Chased Software. Big Tech Is Chasing AI. Are They Making the Same Mistake Twice?

Private equity currently faces a structural crisis characterized by inflated purchase prices, excessive leverage, and a backlog of assets that cannot be exited, positioning private credit as a superior risk-adjusted alternative. The software sector, once a growth darling, now struggles with technological obsolescence as AI disrupts business models that previously relied on code-based moats. While US value investing has faltered due to the rise of intangible-heavy companies, Japan presents a distinct contrarian opportunity. Governance reforms in Japan are forcing companies to divest non-core assets and return capital to shareholders, creating a "1960s-style" value play in a tangible-heavy economy. Dan Rasmussen, founder of Verdad Advisors, emphasizes that these shifts highlight the danger of consensus-driven investing and the necessity of identifying systematic expectation errors rather than relying on traditional, often obsolete, accounting metrics.