Will Blackrock Benefit From Lehman's Downfall?

One of my fears with Blackrock (BLK) was once shorts jumped on the Merrill Lynch (MER) bandwagon to make it the next Lehman (LEH), it would be forced to sell its stake in Blackrock. This speculation caused a lot of damage to Blackrock earlier in the year [Jul 17: Blackrock Earnings Excellent as Usual; Merrill Won't Be Selling]

Now it might seem strange to buy one of the few stocks "up" in a bad open, but since my timeline is longer than 48 hours (most people buying the damaged stocks will "flip" them out in a few hours and are just daytraders at this point), I think this is now a huge positive and Blackrock can continue it's business of being a dominant financial. I would not be surprised to see the government giving it much of Lehman's balance sheet to liquidate as it has been doing with Bear Stearns (BSC).

I'm upping the stake from 0.6% to 1.2%

Long Blackrock in fund; no personal position

Comments

[HedgeThat:]

Blackrock should continue to do poorly in this environment as investors leave their fixed income and equity portfolios for cold hard cash and gold.

2008 Oct 23 09:55 AM