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KKR

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August 21, 2013 – Comments (3) | RELATED TICKERS: BX , KKR

Sold 20 puts to open for KKR, the Jan15 $22 one for a premium of $5.20.  So either I keep the $10,400 or I get to buy KKR by January 2015 for a net cost of $16.80.  The stock currently sells for $19.37.

They are basically in the same business as Blackstone. They are more generous in dividends tho.  In my opinion this stock will see $25 before it sees, if ever, $16.80.  Just a suggestion for people to consider.

3 Comments – Post Your Own

#1) On August 21, 2013 at 8:31 PM, Mega (99.96) wrote:

Alternative asset manager valuations 

                  TBV        AUM      4% AUM + TBV    Market Cap
KKR          $2.1B         62                4.6                     5.4
APO            2.6          40                 4.2                     4.0
CG              0.1          180               7.3                     8.0
BX              6.2           210              14.6                   12.2
OAK           0.5            90*              4.1                      8.0
ACAS         5.6            15               6.2                      3.8
FIG             0.7           55                2.9                      3.7
OZM          -0.4           37                1.1                      5.0

*OAK assets under management includes 22% stake in DoubleLine 

I like the private equity business model a lot but I would prefer to pay slightly lower prices. I'm holding onto my APO shares but not buying more.

Note that the private equity companies are partnerships. You don't want to hold them in a 401k or IRA because it will cause tax headaches. 

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#2) On August 22, 2013 at 2:03 AM, awallejr (85.50) wrote:

Yes you are right about tax treatment issues Mega.  But selling puts actually gives you a chance to buy these stocks at dicsounts, or if they keep going up at least you still make money.

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#3) On December 20, 2013 at 5:11 PM, awallejr (85.50) wrote:

Well it did hit $25 earlier this week.  Option suggested now trading at 2.10/2.30.  I could close for a nice gain but I still like the play.

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