Why does private equity buy certain companies? How did Toys R Us go bankrupt so fast? The answer is the same for both, and all PE deals. The deals are predicated on the idea that they can swoop in and leverage the fuck out of the balance sheet and expand the business. More than that, and here’s where incentive comes in, the PE scoundrels make a commission off borrowing money for the company under their control. In other words, Toys R Us made some people a lot of money when they leveraged it out and squeezed the company until it died.
Earlier today I bought CARG — because of the MUH chart, I’ve down a little from my basis, but all is well. The stock has nowhere to go but up, same with my other positions: WK, ZEN, HUBS, TEAM and a few others.
My cash position is around 50%.
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