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The Big Long

  • Books have been written about a few who made fortunes amid the collapse of the housing bubble and ensuing financial crisis, but what about those who bought at the bottom?
  • "Unless the second Great Depression lies ahead,” wrote Oaktree (OAK) Chairman Howard Marks to clients in October 2008, “today’s purchases should produce substantial returns, and in a few years we’ll reminisce together about how easy it was to take advantage of the bargains of 2008-09.” Marks spent 2007 circling the globe raising money ahead of what he was sure would be forthcoming bargains, and, along with partner Bruce Karsh, spent the weeks after the Lehman collapse putting it to work.
  • As for the timing being off as markets didn't bottom for another 6 months: “If God had told us to wait until March 9, 2009, because that would be the low, and we waited to buy then, we never would’ve been able to put that much money to work,” says Karsh.
  • Apollo's (APO) Josh Harris on his "loan to own" investment in LyondellBasell: “We bought the debt at 60 cents on the dollar, we bought more at 50, and then at 40. The low was 20. People were either panicked or forced sellers, and we bought from them all the way down.” Sitting on $500M in losses by year-end 2008, Harris pushed the chemical company into bankruptcy, converting Apollo's debt holdings into equity. The $2B investment eventually reaped $10B in profit, believed to be the largest gain ever on a P-E deal.
  • “Moments like 2008 will continue to present great opportunities for as long as emotion rules the markets,” says Marks. “In other words, forever.”
Comments (6)
  • bbro
    , contributor
    Comments (9455) | Send Message
     
    Any financial advisor who says he got out in 2007 needs to be asked when did he REALLY get back into the market...

     

    Buffett...

     

    http://nyti.ms/UGN8wU
    10 Nov 2013, 09:28 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3772) | Send Message
     
    It's easy to look wise in retrospect. But what if the recession had deepened & we were nowhere near a bottom... with lots of bankruptcies in solid stocks? There was a real reason for the fear at the time. Bigger problem, if you were already fully invested & didn't time getting out magically... you didn't have more to invest and just had to ride a wave back up. Hopefully you had enough in liquid form, to not have to sell low because the recession hit your job or business.
    10 Nov 2013, 06:39 PM Reply Like
  • Joe2922
    , contributor
    Comments (409) | Send Message
     
    Hilarious, this clown is gloating, but if Fed, other CB, and govts hadn't bailed him out by breaking contract law and printing trillions of funny monies, he'd have lost all his cash....next time -- who will bail out the bankrupt govts? They're already zombies in Europe, and now for years, nothing has mattered but more printing!
    Is he really that dumb to think he was smart? He caught falling knives and was saved, but next time there can be no saviors, unless Martians bail out the govts.!
    10 Nov 2013, 08:44 PM Reply Like
  • butterscotch
    , contributor
    Comments (10) | Send Message
     
    Meanwhile he made a lot of money for his stockholders while you were probably sitting on your thumbs.
    12 Nov 2013, 04:15 AM Reply Like
  • whosez
    , contributor
    Comments (107) | Send Message
     
    There were plenty who thought the housing market was going to collapse and the Fed coming to the rescue was the only thing that could avoid a total meltdown after Lehman. They were right; they pulled off deals of a lifetime and can gloat this time. But you're right, if they rush out to buy falling knifes next time, it will probably not end well.
    13 Nov 2013, 11:53 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3772) | Send Message
     
    @Butterscotch - you missed the point of the comments.
    12 Nov 2013, 10:04 AM Reply Like
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