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Olav23 · 06-26-2007, 12:59 PM

Just wondering if anyone is buying any Blackstone to get in on the private equity rush? It is down down down from IPO.

Alternatively, anyone pick up Fortress or planning to buy some GLG Partners when it goes public shortly? (both hedge fund companies, specifically)

I'm not sure how to separate out the investments themselves from the companies, and how much proxy-investment you are getting by buying the company instead of the actual funds themselves.

Just wondered what your thoughts were.

FinanceDude · 06-26-2007, 01:19 PM

Quote:

Originally Posted by Olav23

Just wondering if anyone is buying any Blackstone to get in on the private equity rush? It is down down down from IPO.

Alternatively, anyone pick up Fortress or planning to buy some GLG Partners when it goes public shortly? (both hedge fund companies, specifically)

I'm not sure how to separate out the investments themselves from the companies, and how much proxy-investment you are getting by buying the company instead of the actual funds themselves.

Just wondered what your thoughts were.

Yes, with caution. I had a feeling that the "goodwill" was overblown, but I didn't think it would correct back this much.

Slowly accumulating some positions. They do have a good track record. Now, waiting for Nords to get on me for not providing enough analysis..........

saluki9 · 06-26-2007, 04:21 PM

Wouldn't touch it with a 10 foot pole.

These guys (equity partners) are experts at skimming the cream for themselves and using accounting trickery, packaged loans, etc to leave everybody else holding the bag with little to no risk premium. I don't expect them to do anything different with this. I think they are BRILLIANT for using their name to find liquidity for their billions.

cute fuzzy bunny · 06-26-2007, 04:31 PM

Quote:

Originally Posted by FinanceDude

Now, waiting for Nords to get on me for not providing enough analysis.

If you're waiting around tapping your fingers, I can probably get motivated to bust your chops for a little while until Nords finds the time...

Quote:

Wouldn't touch it with a 10 foot pole.

Uh oh...financial planner deathmatch...

Danny · 06-26-2007, 05:10 PM

No...it smells like cash out time for the insiders. Think they recognize the returns won't be so juicy in the future and they are getting a big payday now.

ats5g · 06-26-2007, 05:28 PM

Hey, if it worked for CFB.....

Nords · 06-26-2007, 05:54 PM

Quote:

Originally Posted by FinanceDude

Slowly accumulating some positions. They do have a good track record. Now, waiting for Nords to get on me for not providing enough analysis..........

Quote:

Originally Posted by saluki9

Wouldn't touch it with a 10 foot pole.
These guys (equity partners) are experts at skimming the cream for themselves and using accounting trickery, packaged loans, etc to leave everybody else holding the bag with little to no risk premium. I don't expect them to do anything different with this. I think they are BRILLIANT for using their name to find liquidity for their billions.

Quote:

Originally Posted by DanTien

No...it smells like cash out time for the insiders. Think they recognize the returns won't be so juicy in the future and they are getting a big payday now.

What's this you financial advisors are supposed to tell people about past records & future performance?

FD, I wouldn't touch Blackstone with your 10-foot pole. Fidelity offered IPO allocations and I passed. Haven't felt so good about passing up an IPO since Google.

IMO IPOs only benefit one class of shareholders-- the sellers. If you dig deep into Fidelity's IPO website you can find 200+ companies they've been given IPO allocations of since 1996. (Not just the aftermarket.) I downloaded that list and in April 2005 checked the performances of the 2004 IPOs that hadn't already gone into bankruptcy. 20 companies had racked up a 15-month return of +25%. Then I took out Google and the remaining 19 had a return of negative 6%. How much did a stock have to suck in 2004-5 to lose money?

I felt that I'd seen enough, but if you want I can e-mail you the spreadsheet for updating & calculating the return of the other 180 companies.

Blackstone's stakeholders have lost all motivation for "future" performance. They could have raised plenty of capital from accredited investors but they chose not to-- that's about all the analysis required. The fact that they received such rich payoffs indicates their shareholder perspective is perhaps a bit different than that of Sergey & Larry...

FWIW I've closed out my shorts on FirstFed and Abercrombie & Fitch and I'm shutting down my "brilliant investor" account. I'm done shorting stocks and I know enough about options to not go there. We may keep our remaining individual stocks for some time-- Intel, Eagle, Diana Shipping, Tate & Lyle, Superior, and of course Berkshire Hathaway, but I think my stock-picking days are over. We'll close out Tweedy, Browne Global Value, too, and then we'll be all-equity/ETF.

FinanceDude · 06-26-2007, 07:35 PM

Quote:

Originally Posted by Nords

Haven't felt so good about passing up an IPO since Google.

I must be the only person who made money on Google, although I only have a total of 700 shares out there, with myself owning 100...........

Danny · 06-26-2007, 07:41 PM

Nords, I do agree with you, there are exceptions, but how can you be sure. Sometime ago - lets see 8 months - my son got in on the IPO where he works $20 now in the $40s

saluki9 · 06-26-2007, 07:46 PM

Quote:

Originally Posted by DanTien

Nords, I do agree with you, there are exceptions, but how can you be sure. Sometime ago - lets see 8 months - my son got in on the IPO where he works $20 now in the $40s

Would you take a medication that was proven to work on 1 sample patient?

Danny · 06-26-2007, 07:50 PM

Quote:

Originally Posted by saluki9

Would you take a medication that was proven to work on 1 sample patient?

No. What do you mean? The whole stock market is not guaranteed, we don't know what tomorrow will bring. Nothing is in stone even indexing and allotment theory. Stock analysts used to be high on Enron as a sure thing...

saluki9 · 06-26-2007, 07:57 PM

Quote:

Originally Posted by DanTien

No. What do you mean?

What I meant is that studies have shown (I am way way too tired to look them up now) that IPOs are great investments as long as you are the company's senior management or an investment banker. As for the public, they don't fare so well

The fact that SOME IPOs do well (like your son's) does not change the fact that most are TERRIBLE investments. If you look at the actual amount raised in most IPOs it is not much. This shows us the real purpose of most of them is for the management to get rich, not raise capital for the company.

BTW: I love your diner reviews.

Danny · 06-26-2007, 08:20 PM

Quote:

Originally Posted by saluki9

What I meant is that studies have shown (I am way way too tired to look them up now) that IPOs are great investments as long as you are the company's senior management or an investment banker. As for the public, they don't fare so well

The fact that SOME IPOs do well (like your son's) does not change the fact that most are TERRIBLE investments. If you look at the actual amount raised in most IPOs it is not much. This shows us the real purpose of most of them is for the management to get rich, not raise capital for the company.

BTW: I love your diner reviews.

Oh, thanks very much...I don't feel like arguing now that you've softened me up!

But I think all the stock market is made up of former IPOs (think this is true

) so it can work out...

Olav23 · 06-26-2007, 08:21 PM

http://bear.cba.ufl.edu/ritter/IPOs2005-5years.pdf

FinanceDude · 06-26-2007, 09:50 PM

Quote:

Originally Posted by DanTien

Oh, thanks very much...I don't feel like arguing now that you've softened me up!

But I think all the stock market is made up of former IPOs (think this is true

) so it can work out...

I bought MSFT a month after the IPO, and sold it because I thought 496% was ALL you were supposed to make on a stock, don't get greedy.

Too bad I missed out on the next 12,000% return in MSFT...........

Nords · 06-26-2007, 09:55 PM

Quote:

Originally Posted by DanTien

Nords, I do agree with you, there are exceptions, but how can you be sure. Sometime ago - lets see 8 months - my son got in on the IPO where he works $20 now in the $40s

I suspect your son must have a much higher faith in management and a much greater patience for plowing through 150-page prospectuses (prospectii?) than I do.

I'm not disputing the fact that an occasional IPO can hit it big. I'm saying that there are better investments and more profitable ways to spend my time, even if the Blackstone boys had bothered to put on the slightest appearance of seeming to care about their new shareholders.

Danny · 06-26-2007, 10:16 PM

Quote:

Originally Posted by Nords

I suspect your son must have a much higher faith in management and a much greater patience for plowing through 150-page prospectuses (prospectii?) than I do.

I'm not disputing the fact that an occasional IPO can hit it big. I'm saying that there are better investments and more profitable ways to spend my time, even if the Blackstone boys had bothered to put on the slightest appearance of seeming to care about their new shareholders.

He was given an "insiders" price of $20 while it was priced the next day for the market at $25...of course there was no guarantee it would keep above 25...I had a chance to buy at 25 or so, but chose not to, because as you said there are other ways to spend my time more profitably like playing golf instead of doing DD and worrying...besides I'm now at the point where I don't have to hit extra base hits...singles are good enough..

CyclingInvestor · 06-27-2007, 12:04 AM

Quote:

Originally Posted by saluki9

Wouldn't touch it with a 10 foot pole.

These guys (equity partners) are experts at skimming the cream for themselves and using accounting trickery, packaged loans, etc to leave everybody else holding the bag with little to no risk premium. I don't expect them to do anything different with this. I think they are BRILLIANT for using their name to find liquidity for their billions.

I was about to type in my response, but this pretty much covers it.