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PE4FAMS Private Equity for Families Blog

The Private Equity for Families Blog

Insight for those who want to include private equity or direct investment in privately-held businesses in their portfolios. The opinions expressed in the PE4Fams blog are those of  Rob McCreary and not necessarily those of CapitalWorks or its employees.

Robert McCreary CapitalWorks private equity Cleveland

Bitcoin On The Front Page…Of Your Tax Return

Bitcoin looks like a juicy federal and state revenue source for 2020. Based on the chart shown from the buybitcoinworldwide.com website below, there has been approximately $304 billion of capital appreciation in the cryptocurrency since January 1, 2020. It is pretty much a guess about what portion of that

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Customizing Index Funds Like Playlists

“Tell Her No” was a classic rock hit from a British rock group The Zombies. The 1965 lyrics should be exhumed and applied to the runaway market appreciation in those public stocks where operating earnings do not even cover the annual interest expense: “And if she should tell you

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States Are Badly Bruised By Covid-19

For the last three months we have been so fixated on red and blue states we hardly noticed how many “black and blue” states are struggling from the pandemic’s onslaught. Unlike the Federal system where money printing of all kinds and deficit spending are accepted monetary policy tools, states

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A Race To The Bottom The US Can’t Win

Few people really understand how currencies work. It requires math to figure out how much more or less a cup of coffee (Starbucks), or a hamburger (Big Mac), costs in Boston versus the same products in Moscow, Shanghai or Hamburg. If we had a universal currency like Bitcoin or

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Ant IPO Showcases South China Equity Markets

The world has 10 major stock exchanges, three of which are either controlled or influenced by China. Here are those exchanges: Exchange Established Mkt. Cap New York Stock Exchange May 1792 $19.3T NASDAQ February 1971 $13.8T Tokyo Stock Exchange January 2003 $5.7T Shanghai Stock Exchange November 1990 $4.9T Hong

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Minor League Owners and Congress Balk At MLB Pick Off

This is the time of year when you can actually find child like joy in your Major League Baseball (MLB) teams. Take the Cleveland Indians with their small market budget as an example. Not-withstanding, their loss of an important starter, Mike Clevinger, the Tribe has actually secured a playoff

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Like Pizza, Stocks Now Come in Slices

I remember the Over-The-Counter Trading Desk at a regional securities firm called Prescott, Ball& Turben (PBT) where I was employed in the Mergers & Acquisitions group from 1987-92.  Trading small stocks was an art with high commissions and limited liquidity.  Good trading desks did not “position” securities by holding

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Presto Change-O Cures Everything

For most politicians the US economy is a fable, like the magic coffee grinder in the story about “How the Sea Got Salty”. According to legend the owner of the coffee grinder was a poor farmer who first used the magic grinder to provide food and shelter for his

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The Book of Exodus Portends More Money Printing

When the Israelites fled Egypt under Moses’ leadership they were constantly attacked by the Amalekites.  In the valley of Rephidim the Israelites under the command of Joshua, met Amalek in a battle where Moses guaranteed his general a victory as long as Moses could oversee the fighting. According to

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Covid-19 Challenges The Hamster Wheel of Sales & Marketing

We have watched quite closely the first half financial performance of our portfolio of lower middle market companies. Almost all of them have benefitted from four trends that have accelerated in the pandemic:             Business Travel Has Stopped             Business Entertainment Has Been Curtailed             Capital Expenditures Have Focused

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The Fed’s Bay of Fundy Moment

I have written before about moon tides (and how they remind us about investment markets tending to exaggerate fear or greed) https://capitalworks.net/moon-tides/. Dangerous shoals are hidden when the tide is 20% higher and keels are in the mud or on the rocks when the moon tide has fully ebbed.

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Hertz Bankruptcy: Who’s In The Driver’s Seat?

Bankruptcy is a little bit like the Greeks’ vision of Hell or Hades. There is a river you have to cross called the Styx with a ferryman called Charon whom you have to pay with a coin for safe passage. If your relatives forgot to bury you with a

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If You Give a Politician a Printing Press?

Laura Numeroff writes really popular children’s’ books. She is famous for her series on animals: “If You Give A Moose A Muffin”, “If You Give A Mouse A Cookie”, “If You Give A Pig A Pancake”, and many others. These are fun books for kids because of alliteration and

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Double Whammy of Deflation

Central banks consider deflation a “devil child” because of its pernicious psychology. Deflation encourages waiting for purchases until they get cheaper—which they do every day as demand is delayed. The result is a downward price spiral and slow GDP growth. Even though this sounds good for the consumer, it

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What Is Going on With Bitcoin?

College friends are brutally honest. So, it came as no surprise to me in a Zoom cocktail chat with former classmates over the weekend there was some curiosity but even more suspicion, about Bitcoin’s recent price rises. Here is BTC’s chart over the two years from the May 6, 2020,

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Cheeseburger, Cheeseburger, Cheeseburger

One of the funniest and most memorable Saturday Night Live skits was John Belushi and The Olympia Restaurant. That New York diner provided customers with a full menu of food choices, but only  served “Cheeseburger; Pepsi no Coke; and no fries, chips.” Regular patrons like Gilda Radner just ordered

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The Coming Debt Jubilee

The current safety net programs being offered by the Federal Reserve Bank are widespread. They include the Paycheck Protection Program (“PPP”) safety net of 8 weeks of payroll subsidy for companies that have existing Small Business Administration loans. They also include Fed purchases of a wide swath of debt

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World 2.0

As a society we have been moving at 80mph most of my adult life. There is endless stimulation from people, meetings, media, business, religion, socialization, travel, sports, entertainment, literature, the stock and bond markets, internet and iPhones. Sometimes we are moving so fast we never have time to process

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Value Investors and an Unpredictable Future

In a recent conversation about asset allocation with an astute growth investor, I was surprised he dismissed the possibility of a socialist as President. He simply could not see that happening and, therefore, it could not serve as a reason for changing a traditional 60 percent equity/40 percent bond

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New Reason to be In Private Equity

When we started our private equity firm 20 years ago, high net worth individuals and institutions were interested in the asset class for three big reasons: Outperformance versus the Stock Market Lack of Correlation to Publicly Traded Asset Classes Persistent Outperformance by Top Quartile Managers. McKinsey & Company just

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To Live With The Classes, Sell To The Masses

I was waiting at a traffic light in Naples Florida, and a radio jingle about “going first class” with Marcus by Goldman Sachs captured my attention.  Goldman is selling savings accounts called “Marcus” to the masses and advertising on the radio???? This wasn’t the Goldman Sachs I remember. The

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This blog represents the views of Rob McCreary and do not reflect those of CapitalWorks or its employees. This blog is not intended as investment advice. Any discussion of a specific security is for illustrative purposes only and should not be relied upon as indicative of such security’s current or future value. Readers should consult with their own financial advisors before making an investment decision.