6 replies to this topic

[ogm]

BX is posting earnings Monday.

The companies failed IPO is basicaly the symbol of the end of LBO frenzy and the credit problems in that area ... and yet....

They are premier money management firm. And what is more important.. China owns 30% of the company.
With that kind of owner support they get a great foothold in China. And I don't see Chineese economy slowing down significantly here any time soon. Chineese stock market is hot hot hot, and will be getting even hotter as China takes the global economic leadership flag away from USin the years to come. Sorry folks, unfortunately its happening, as sad as I am.

Also if BX posts good numbers Monday, it should help the overall market, IMO. I'm long FIG already from a couple days ago. After I looked at some of the stuff they are buying and got seduced by almost 5% dividend.. I bought into it at what I think is very risk manageble price of 18.5. I wonder what dividend will BX pay.

From technical perspective both look pretty oversold too. And definitely out of favor with the market, which makes them attractive from my perspective. I love buying stuff that everyone hates.

I'm also buying KFN (KKR's financial unit, already public) ... Insiders buying, stock seem to have found a floor on 60 min chart. I'll take the risk too. Also looking to buy more NRO.

Folks on capital stool buying TWM for their IRA accounts and I'll buy NRO


Here is BX and FIG daily...

[emdee]

>>> And definitely out of favor with the market, which makes them attractive from my perspective. I love buying stuff that everyone hates. <<< A strategy that has worked well for me over the years. M

[NAV]

oqm, Looks like a good trade to me for the long term, as long as the current bottom holds. I remember a few years back (i think it was 2002 or 2003), when the whole airline industry was in trouble and there was a massive rally, amidst the gloom and doom.

[kaiser soze]

Are you already long BX or do you plan to go long after earnings (Monday morning) ? I think you mean you are not yet long, but just asking. What if the reaction is negative ? Would you still buy ? Or is it just something you are tentative on for the moment ? Thanks, KS

Edited by kaiser soze, 11 August 2007 - 11:45 AM.

[Sentient Being]

I remember a worker in the power industry telling me to buy Enron during the collapse, telling me it just had to go up. It had enough assets, the business model, etc etc. I declined. But he sure was sure that a fantastic buy was in the making.

[JAP]

You have some big brass ones OGM. Hope it works out for you.

[ogm]

I remember a worker in the power industry telling me to buy Enron during the collapse, telling me it just had to go up. It had enough assets, the business model, etc etc. I declined. But he sure was sure that a fantastic buy was in the making.

I didn't buy it yet. Will be buying Monday. Frankly I doubt it goes down on earnings. They are supposed to make 46 cents, thats about 12 P/E at current levels, which isn't bad. But its all about cash flow anyway. Look at it this way.. they have took big advantage of the low interest rates and bought a lot of cash flow rich companies. Yes the market conditions aren't good for IPOs now, but they do still get to keep the cashflow. And once the conditions improve they'll do much better. Also look at Orbit IPO... Its wasn't a great sucess, but you know why ? Because Blackstone got to keep the IPO proceeds and they didn't go to the company to grow business. So they made a lot of money anyway. Thats what they do. Its just a bet on very shrewd management.

Also China goevernment's stake will pretty much guarantee them good business in China from the legislative support and other points of view.

As for Enron... Enron wasn't a good buy back then.. but the rest of utilities were. As a matter of fact a few month later utilities staged a huge rally and never looked back untill now. Same thing with mortgage and REITS is going on right now, IMO. AHM and a few others may have imploded, but the rest have sold off heavily on that. Sentiment in anything that is even remotely related to real etate and mortgages is hugely negative. Thats why I'm buying NRO and a couple others.

Besides BX isn't exactly Enron.

Also... if BX posts good earnings, that means they know what they are doing, and in the credit crunch environment they will be more likely to get financing. Actually it will probably ease financing burdens on LBO market in general. And considering a lot of stocks sold off I'm sure there will be some kinds of deals done. Nothing like past 2 years, but still.

So good BX earnings will be good for the financials and the market.

BX is just very out of favor with possible tax change, credit crunch and so on. Basicaly the sentiment can get only better from here for them.

By the way.. very relevant read to today's market, not just BX related.

http://www.thestreet...s...E&cm_ite=NA

Edited by ogm, 11 August 2007 - 03:58 PM.