"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.