Comments on: Hedge Fund IPOs – Individual Investors should be careful

By: Joe Ponzio

Joe Ponzio — Thu, 05 Jul 2007 19:50:58 +0000

Good stock. Bad stock. It\'s all the same with IPOs. There is no way for the individual investor to know anything about the business of Blackstone (or other IPOs) because there is no past data. Sure, we know what we heard. But what do the audited financials tell us about the history of the company?

At this point, nothing. We know the Street was/is excited. Still, if you are going to invest in stocks, why not buy into well-established businesses with consistent histories and predictable futures. It\'s a boring way to make a lot of money.

Leave the IPOs to Wall Street\'s gamblers.

By: Paul Lamont

Paul Lamont — Thu, 05 Jul 2007 15:31:34 +0000

M-
Not only is it 1999, but replace \”hedge fund\” with \”investment trust\” and you are describing the summer of 1929. If you have time, read the last 4 chapters of \’Only Yesterday\’ by Fredrick Lewis Allen. It can be found free on the web. It describes the real estate and stock bubble of 1926-1929. Amazing the similarities.

By: Paul Lamont

Paul Lamont — Thu, 05 Jul 2007 15:24:44 +0000

By: Scott

Scott — Wed, 04 Jul 2007 08:54:57 +0000

This is not a very good blog for analysis of your propositions. Most people just say \"right on Mark\" or talk about the problem of the \"masses\" and the \"system\" and the \"man\". What a waste. Here is my comment. Hedgefunds, if understood properly by the stock investor could be a valuable investment. Number one, you need to know that the customers, e.g. the partners that have placed money into the fund, are always going to come first. No partner money, no fund. From there you should know that an investment, while related and tied to the partners returns (via the 2%/20% agreement) will be more volatile because the net present value of future cash flows will be incorporated into the shares, whereas the partners will simply see their year by year returns. Between investors and partners, heck between ANYONE and ANYONE, there may be different risk thresholds. However, if we are dividing up the same pie and getting our percentage we should all have the same goal to make that pie as large as possible. I guess your risk comment is a bit of a red herring as it will exist in ANY investement vehicle that contains multiple investors and any management oversite.

Also, because of the need to keep customers/parnters happy, the strategy of the fund will necessarily have to please the customers. So I think that these funds will stay competitive vis a vis their competitors. The issue is that the shareholders need to be sophisticated in understanding their position (they are more or less along for the ride!).

By: Faraz Yusufi

Faraz Yusufi — Tue, 03 Jul 2007 18:25:21 +0000

an excellent article as it not only warns why individual investors should be careful in investing in hedge funds/private equity firms but it also gives a very good reasoning as to why it would not be such a good idea to take a private equity firm public (capitol returns VS capitol appreciation), only thing that I feel should have been addressed here was why heavy weights such as Blackstone then chose to go public? also wouldnt you say that Berkshire Hathaway is an example of a publicly traded company that functions like a private equity firm? what makes them so successful? Warren Buffets charms?

By: chinatronic

chinatronic — Mon, 02 Jul 2007 06:18:16 +0000

China mobile phones wholesale and manufacturers, Find cheap mobile phones, and discount deals on the latest mobile phones, and Derect Buy it online from china

By: chinatronic

chinatronic — Mon, 02 Jul 2007 06:17:45 +0000

China mobile phones wholesale and manufacturers, Find cheap mobile phones, and discount deals on the latest mobile phones, and Derect Buy it online from china

By: Jerry R. Reynolds

Jerry R. Reynolds — Mon, 02 Jul 2007 03:28:54 +0000

Isnt this whole notion just a scheme? I mean, IPOs are used to generate capital, what does a Hedge Fund need all the cash for? When you file with the SEC it states that and IPO is not responsible to pay back generated funds. Its straight out of the movie Boiler Room.

The problem is people are like sheep. In the early 90\’s everyone chased Tech. It was more about money than product, thus a few survived and the rest crashed. For the last 8 years real estate was the bright idea. People over extended well beyond their means, into an industry that is very complex. Phoenix alone has 46,000 homes in current foreclosure. With the average American buried in nearly $9,300 of consumer debt, whats next? In many ways I am glad the market is getting its revenge. Its forcing people to realize how careless they have been.

As Americans, when did we decide it is better to follow the leader hoping for crumbs? I must have missed that vote. While everyone was going in debt chasing the latest trend, I built a company that is debt free. My company is original with no major competitor, we are soon to be the only company traded in our profession, we provide a viable service and unlike most major corporations, our only major expense is our employees.

Mark, I sent you a few emails and now posted this. I am requesting your help/advise on this project. You are always looking for the next big thing, well let me bringing it to you.

Jerry R. Reynolds
jerry@ushomewatchers.com
http://www.ushomewatchers.com

P.S. Get KG!

By: 365 Days

365 Days — Sun, 01 Jul 2007 17:35:50 +0000

Love the post. I\'ll have to check in more often now that I found this. What a diamond in the rough. Great stuff, keep it up!

365 Days... One Dream... Can I Do It?
http://onemansgoal.blogspot.com

By: Paul Cyopick

Paul Cyopick — Sun, 01 Jul 2007 10:45:52 +0000

What does Mark Cuban and Vanilla Ice have in common?

Artificial Hip

Seriously though, get well soon Mark.