Tuesday, August 07, 2007

Market Doom and Gloom?

Learn to swim with sharks and not get eaten!

In this article by Gwyn Morgan published in the Globe Market Opener report today our analyst looks at the goings on in market capitalization and shifts between private and public equity.
Blind Faith?

"The private equity formula, 2007 version, depends on the availability of tax-deductible low-rate debt replacing higher cost non-tax deductible equity. It's all about leverage. CEOs who share my belief in prudent balance sheets are branded as overly conservative has-beens."

Exactly! Quick cash and BIG payoffs are there for the taking as Private equity bosses liquidate their personal equity through public sell offs of their business in a new round of IPO's.

Although the author goes on at length about risk management and debt the real story IMO is in the actions of the largest individual stakeholders. These guys and gals KNOW how to hang on to their money and make it grow! Watch and learn.

So in what looks like a trend to privatization of public companies the real story is that this is just a precursor to a new round of rejuvenation as more investments become available.

Laws of supply and demand will prevail!
However, if you are a small investor ( aren't we all?) where do you get the cash to take advantage of the new buying opportunities?
Don't count on credit because that's the underlying issue here! Money supply is diminishing due to the long term effects of low interest rates. That's why the big dogs are going back to equity deals.
The writing is on the wall and that means time to cash out for Joe Schmoe's like me and probably you. Get yourself some liquid assets while the getting is good and be ready for the feeding frenzy that's going to come.

And on the other hand we have these types to contend with:
Dymphna Understands Clowns in Politics! That's a H/T to Gates of Vienna....





Blogger WomanHonorThyself said...

ah but what to invest in Ommag!..Heh

8/07/2007 1:48 p.m.  
Blogger PGP said...

My approach is to pick a business you understand to some extent! See if it's getting sold off for no good reason ..... Watch for the chicken littles to sell it down and start buying.
I like tech stocks that get pounded through what I call guilt by association!

8/07/2007 2:34 p.m.  
Blogger zolton said...

I just saw you're picture, And people call ME the resident troll! LoL

Because of your comments you now you get your own personal conscientious enlightenment philosopher!

8/08/2007 11:57 a.m.  
Blogger PGP said...

I seek enlightenment......

8/08/2007 2:13 p.m.  

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