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> Private equity is a form of investment, not a form of investor. Surely a particular form of investment typically attracts a particular form of investor? > Y

> Private equity is a form of investment, not a form of investor. Surely a particular form of investment typically attracts a particular form of investor? > You can only sell for the price that somebody wants to buy for. And if you don't want to sell for that price, because you'd lose money on the deal, you are kinda stuck, yes? > If you believe anybody who promises you a certain return on your high risk investment, then I have a bridge to sell you. I think you're doing the "false perspective of what … a word means" thing here yourself. > Everybody who has invested any money into any type of investment is also "stuck" waiting for somebody to buy it for a higher price if they don't want to sell for the price offered right now. Sure, but there's stuck in a puddle, and stuck at the bottom of the Challenger Deep. The 2008-2009 financial crisis happened because a bunch of investors got very stuck with assets that were suddenly not worth much.

carlosjobim 2mo ago
> Surely a particular form of investment typically attracts a particular form of investor? The term is so broad that you cannot say that for private equity. > And if you don't want to sell for that price, because you'd lose money on the deal, you are kinda stuck, yes? Yes, just like my uncle is stuck in his car because he doesn't want to get out of it. Only a person who reasons like a fool (like this journalist) would consider themself to be "stuck" with an investment which they cannot make a profit on and have to wait and pray. Sure, many people think like that, but a seasoned or professional investor who thinks like that has to be instantly fired and probably tarred and feathered by whoever has trusted their money with him. The correct way: Instead of demanding that God forces somebody to pay you an amount that nobody wants to pay for your investment, you have to accept your losses so that you can get your money out and invest it into something better. The journalist takes this: "As of June 30, private equity firms had 33,575 unsold companies in their portfolios, according to PitchBook, an industry data firm. " And turns it into this: "Private Equity Is Stuck with 33,575 Unsold Businesses" When the true meaning is that those private equity firms are invested into that number of companies. They will always be invested in companies which they haven't sold yet. Otherwise they wouldn't exist. Every pension fund in the world is invested into hundreds or thousands of "unsold businesses" as long as they are invested. The purpose of private equity firms is to invest in businesses. Otherwise they have no investments.
- ceejayoz 2mo ago
  > The term is so broad that you cannot say that for private equity. You called these "high risk investments". That tells you at least some broad information about the sort of investors who are attracted to it. Claiming otherwise makes you appear as ignorant as you're asserting the journalist is. > Yes, just like my uncle is stuck in his car because he doesn't want to get out of it. I think it's more akin to deciding if you stay in or get out of a car engulfed by floodwaters; it depends on a number of things, with neither option being ideal. Maybe the flood will be short? How good of a swimmer am I? What are other people doing? Is it still raining? Is there a rescue helicopter coming? How fast is the water? How deep? There's a downside to getting out of the car right now, in other words, that must be considered. > Only a person who reasons like a fool (like this journalist) would consider themself to be "stuck" with an investment which they cannot make a profit on and have to wait and pray. Plenty of investors have to wrestle with deciding if an investment will recover or continue to plummet. The article even directly addresses this: "Many in the industry predict that private equity firms will eventually be forced to sell and give cash back to investors, even if it means accepting a lower price." > When the true meaning is that those private equity firms are invested into that number of companies. They will always be invested in companies which they haven't sold yet. Which is why the journalist noted said number is more than twice as many as a decade ago and quotes PE firms saying stuff like "exits were being 'prudently delayed'". Your objections here feel very much like "the finance journalist left assumed some basic knowledge and reading comprehension skills anyone reading a finance article should already possess". They aren't writing for Wikipedia.
  - carlosjobim 2mo ago
    > Plenty of investors have to wrestle with deciding if an investment will recover or continue to plummet. All investors should constantly be in consideration of if their investment is appreciating or depreciating in value and wrestle with that. Past value should in general not be a factor - unless the investor is a fool. Only future value is of interest. There are only two outcomes: Price goes up or price goes down. If you believe that the price will go up, you should invest more, no matter if you already have a profit or a loss. If you believe that the price will go down, you should sell, no matter if you already have a profit or a loss. What price you bought in at has no relevance. And this is the core of the matter that the journalist doesn't seem to understand. Fluctuations aside - which shouldn't be a big factor for unlisted companies. If I'm an investor and the manager of the PE firm gives me a loss of 50% instead of a 20% loss because he was waiting for "recovery" until it was too late - then I'm going to tar and feather him, together with all the other investors. > Your objections here feel very much like "the finance journalist left assumed some basic knowledge and reading comprehension skills anyone reading a finance article should already possess". They aren't writing for Wikipedia. No, but they are writing an article without any flesh on the bones, and twisting it into some kind of drama. Private equity firms are (allegedly) invested into more companies than they were a decade ago. Good! Not a big deal if the investors loose some money, they knew the risks if they weren't fools. Good that companies get investments. If they didn't want or need investments they wouldn't sell shares to private equity.

carlosjobim 2mo ago

> Surely a particular form of investment typically attracts a particular form of investor? The term is so broad that you cannot say that for private equity. > And if you don't want to sell for that price, because you'd lose money on the deal, you are kinda stuck, yes? Yes, just like my uncle is stuck in his car because he doesn't want to get out of it. Only a person who reasons like a fool (like this journalist) would consider themself to be "stuck" with an investment which they cannot make a profit on and have to wait and pray. Sure, many people think like that, but a seasoned or professional investor who thinks like that has to be instantly fired and probably tarred and feathered by whoever has trusted their money with him. The correct way: Instead of demanding that God forces somebody to pay you an amount that nobody wants to pay for your investment, you have to accept your losses so that you can get your money out and invest it into something better. The journalist takes this: "As of June 30, private equity firms had 33,575 unsold companies in their portfolios, according to PitchBook, an industry data firm. " And turns it into this: "Private Equity Is Stuck with 33,575 Unsold Businesses" When the true meaning is that those private equity firms are invested into that number of companies. They will always be invested in companies which they haven't sold yet. Otherwise they wouldn't exist. Every pension fund in the world is invested into hundreds or thousands of "unsold businesses" as long as they are invested. The purpose of private equity firms is to invest in businesses. Otherwise they have no investments.

ceejayoz 2mo ago
> The term is so broad that you cannot say that for private equity. You called these "high risk investments". That tells you at least some broad information about the sort of investors who are attracted to it. Claiming otherwise makes you appear as ignorant as you're asserting the journalist is. > Yes, just like my uncle is stuck in his car because he doesn't want to get out of it. I think it's more akin to deciding if you stay in or get out of a car engulfed by floodwaters; it depends on a number of things, with neither option being ideal. Maybe the flood will be short? How good of a swimmer am I? What are other people doing? Is it still raining? Is there a rescue helicopter coming? How fast is the water? How deep? There's a downside to getting out of the car right now, in other words, that must be considered. > Only a person who reasons like a fool (like this journalist) would consider themself to be "stuck" with an investment which they cannot make a profit on and have to wait and pray. Plenty of investors have to wrestle with deciding if an investment will recover or continue to plummet. The article even directly addresses this: "Many in the industry predict that private equity firms will eventually be forced to sell and give cash back to investors, even if it means accepting a lower price." > When the true meaning is that those private equity firms are invested into that number of companies. They will always be invested in companies which they haven't sold yet. Which is why the journalist noted said number is more than twice as many as a decade ago and quotes PE firms saying stuff like "exits were being 'prudently delayed'". Your objections here feel very much like "the finance journalist left assumed some basic knowledge and reading comprehension skills anyone reading a finance article should already possess". They aren't writing for Wikipedia.
- carlosjobim 2mo ago
  > Plenty of investors have to wrestle with deciding if an investment will recover or continue to plummet. All investors should constantly be in consideration of if their investment is appreciating or depreciating in value and wrestle with that. Past value should in general not be a factor - unless the investor is a fool. Only future value is of interest. There are only two outcomes: Price goes up or price goes down. If you believe that the price will go up, you should invest more, no matter if you already have a profit or a loss. If you believe that the price will go down, you should sell, no matter if you already have a profit or a loss. What price you bought in at has no relevance. And this is the core of the matter that the journalist doesn't seem to understand. Fluctuations aside - which shouldn't be a big factor for unlisted companies. If I'm an investor and the manager of the PE firm gives me a loss of 50% instead of a 20% loss because he was waiting for "recovery" until it was too late - then I'm going to tar and feather him, together with all the other investors. > Your objections here feel very much like "the finance journalist left assumed some basic knowledge and reading comprehension skills anyone reading a finance article should already possess". They aren't writing for Wikipedia. No, but they are writing an article without any flesh on the bones, and twisting it into some kind of drama. Private equity firms are (allegedly) invested into more companies than they were a decade ago. Good! Not a big deal if the investors loose some money, they knew the risks if they weren't fools. Good that companies get investments. If they didn't want or need investments they wouldn't sell shares to private equity.