Monday, March 23, 2009

Understand the news before it's reported!

The S&P just had it's biggest 10 day advance since 1938.

Goldman Sachs, which said that it was interested in selling a piece of ICBC (worth about $8 billion), also said that it was interested in buying the iShares business that Barclays was looking to unload.

The price was $5 billion this weekend. Now it looks like bids are coming in north of $6.5 billion.

The private equity folks that are interested, do not want the securities lending business, which lends out shares to shortsellers.

You can say that is because of AIG non-success in securities lending, or maybe, it's because private equity had a chance to read the tea leaves, and Wall Street is only now belatedly catching on!

But the tea leaf reading is pretty clear here.

One week ago, I advertised the private equity plays.

Fortress Investment Group (FIG 1.59), Blackstone (BX 6.06) and Kohlberg Capital (1.90) all had good moves the last few days, and all look like trades now.Even in this environment, nobody believe Kolhberg's marks on its CLO portfolio, but they spin a better story now that the shorts are being neutered.And the neutering of the shorts gives these companies time, which gives them forebearance.Which means you can get substantial moves higher in all of these names!

FIG went from $1.59 to $2.09 and closed at $2.22 in after hour action today, up 40%.
BX went from $6.06 to $7.81 and closed at $8.40 in after hour action today, up 39%.
KCAP went from $1.90 to $3.13 up 64%.

All in a week.

All as advertised!

After the close, it finally dawned on Forbes that maybe private equity would be enriched by the Geithner plan.

I prefer to give you the news before it happens.

Then I can advertise it after it does!

As advertised!!!

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