Here’s What’s Happening with Private Equity

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Private equity going down. Yeah, I got a pretty good track record, pretty good track record at spotting bubbles and when they’re going to pop. This one’s interesting. The private equity bubble is a fascinating bubble because how do you get to any sort of price discovery? These private equity companies

basically price their investments any way they want to price their investments. And I’ve had experience with this in the past with hedge funds doing the exact same thing with, but these were, they were doing it with actually with publicly traded companies that didn’t trade much and they owned much of the float. So again, they priced it over they wanted to, but if they actually tried to sell it, there was no buyer for it. There wasn’t any liquidity there. That makes

Private equity is a similar type of a situation. Over the past few decades, we’ve got a lot of money that was flowing into private equity. And again, all of this stuff was coming from institutional investors, pension funds, big money players. Now let me tell you why things are starting to look a little bit

Okay, this is when my bull excrement meter and bubble meter starts going into overdrive. All of a sudden, all of a sudden over the past, I’d say past 12 months, I am getting an inordinate amount of emails and phone calls and invites. Everybody wants to date the Markowski’s. That’s right. All of these private equity companies and various different

I guess you want to call them private equity compilers, wanting to take the Markowski brothers out to dinner and want to get our clients involved in all of these alternative investments for your clients and opportunity to get your clients in all of this private equity. Yeah, I’ve been there and done that with the hedge fund guys back in the day. Again, we’ve told this story.

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I would never have to go on a pay for vacation if I didn’t want to. Dinners, everything like that. They want it in. They want our clients’ money. But again, we can spot the BS a mile away. well, institutional investors and whatnot, and the people that run a lot of these pension funds, they’re not necessarily as sharp as tax in the box. And they want

They want to goose their returns and they went to these private markets. Private equity assets under management right now estimated to be three point five trillion dollars. That’s ten times what it was two decades ago. OK.

Someone’s got to buy these things. You’re talking $3 .5 trillion. How are you going to take all of these things public? A lot of things that private equity companies do is that obviously they market these companies. They want to take them public at some point in time or sell them to someone else. But the reality is right now, many of these pension funds want to get liquid. A lot of these institutional investors want to get out. They’re not getting the returns

they expected and what they have. They’ve got this big chunk of company and their portfolio that they’re being told is worth X but they can’t sell X and X is not paying any sort of yield on it and they might say that their pension is worth X amount of dollars but again, is it liquid?

No, it’s not. Many of these pension funds, again, they need to be liquid, right? They gotta pay out. They have to pay people that are on their pension. And because of some of these massive investments in private equity that are not being moved, they actually have to take out loans to pay people off. Something wicked.

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this way comes with this. This is going to be a major problem. And this is why right now, right now, they are trying to find the greater fools happens every single time. Greater fools. And that would be you. That would be you America. That would be you. They’re going to try to get your money. That’s right. They want to mainstream all these alternative investments. And you’re going to start seeing

platforms being rolled out. Said I get pitched all the time. Pitched all the time. And many of these companies, they can’t even get on that. Not yet, but they will. They’ll eventually be on the Fidelity platform and all of the bigger, the Schwab platform, all of that stuff eventually. They want your money. What that means is, is that you’re going to be taken out the pension funds. You are going to be taken out the pension funds. And let me, again, I want to go through this just so you understand. Okay.

They get their money in first. Their goal is to ladder this company up over a period of time, make a nice sexy story out there. Like all of the disruptor companies from not too long ago, the Pelotons and the fake meat companies and all the EV companies, those are laddered up and then they are sold to you. And you end up winning that perverse game of financial, losing that perverse game of musical chairs. You are the last one left standing.

You are the greater fool. Don’t be the greater fool. Watchdog on wallstreet .com.