Business owners like the long view

"One of the reasons business owners are preferring private equity," says Jacoline Loewen, author of Money Magnet, "Is they appreciate that the investors go in for five years. It sure feels better than the short term view of shareholders in the public market who bale as soon as they see anything slightly off."
Long term trends are difficult to remember for investors in public markets.
This is an interesting chart as you can see we are still 5% above the trend line. Yet the public market ignored job loss information that came out last week, and ended up higher by Friday probably due to wishful thinking.
Private equity is in stark contrast to this short term thinking demonstrated in the public markets. Five years with a company before taking back the money is the shared goal. Think how this long term approach by shareholders helps business owners during these times.
One of the top fund managers at my secret handshake club said that these are historic times and our children will read about them. Now that is long term thinking.



4 comments:

Toronto realtor said...

I'm not sure I actually got it. This graph - in simple terms - says that we're in fact are not in a crisis so far because we're still about 5% above the regression line? And that the hard times will come in due time? If that's true... what will be the real crisis like? As Toronto realtor I'd be especially interested in how it will affect the property markets. But I guess there are no real answer to this.
Take care,
Elli

J. B. Loewen said...

Toronto Realtor - you got it.
Good article in Time magazine shown to me by Jeff Watson explaining why Canadian housing prices will not drop like the American housing market - not even close.
Will post the article and then you can give it to your buyers waiting for a bigger price drop!

Toronto realtor said...

Thanks, Jacoline, that would be helpful! Did you post the article yet or did I miss it? I can't find it.. Take care,
Elli

Jeffrey Watson said...

Toronto realtor, it is discussed in the article entitled "Oh, Canada" above, click the link embedded in the post and it'll take you to the exact article.