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May 2008



End the Siege on Fortress!

May 29, 2008 – Comments (2) | RELATED TICKERS: FIG , GS

In the July 2007 issue of The Motley Fool Inside Value, I suggested going short the shares of Fortress Investment Group (NYSE: FIG) and buying Goldman Sachs (NYSE: GS) shares as a hedge. Fortress – the first alternative investments firm to go public in the U.S. – was sporting a post-IPO valuation that was unsustainable. Since June 13, 2007 (the publication of the newsletter), Fortress shares have lost 42% of their value, while Goldman Sachs has given back just 25% [I’ve accounted for dividends in both cases]. Still, FIG is hardly a terminal case; in fact, it has a great franchise and I believe now is the time to consider owning a piece of it. Two things have changed since I first wrote about the company, both of which support my change in stance:

1. As noted, the valuation has come in significantly; and Assets under management (AUM) at the end of the first quarter increased 46% year-on-year to $34.2 billion; and   [more]

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