Thursday, February 25, 2010

My Current View

I'm always reading market commentary.  Where will the market go from here? etc.  While I read quite a bit, there is very little that I actually listen to and act on.  My criteria for this is someone who A) I respect and has an investment view similar to my own; B) Has been successful in the past; and C) Has their own money at stake.  Believe it or not, that narrows the list down to a select few.

One of those people is Carl Icahn.  I read his recent letter to shareholders over at Marketfolly.com.  While he says he's concerned about a double-dip recession, he sees a unique opportunity for cash-rich companies with access to capital to scoop up assets of good companies that have have poor balance sheets.  This market has punished those with too much leverage, and those in better positions will benefit.  The General Growth deal is a prime example of this.  You have a large company with a lot of great assets that had too much debt, and because of market conditions, was forced to enter Chapter 11.  Smart investors saw an opportunity from the start.  Companies with access to the capital (Brookfield, Simon, etc) want the opportunity to acquire these high-quality assets.

This is the kind of opportunity I see in this market.  I don't like the prospects of the broad economy expanding at a strong pace.  It will improve, but we're too reliant on stimulus which alone cannot create sustainable growth.  But there are opportunities, and I'm optimistic about those.  I'll continue to try and spot those, and share them here.  The biggest goal of this site is to share my knowledge with whoever would like to read it.  I spend a lot of time filtering out what I believe to be the best information, and pass that along.  I may not be an expert at investing, but I feel I'm pretty good at knowing who to listen to, and who to ignore, and that can usually get you pretty far.

Disclosure: Long GGWPQ

No comments: