LBOs and Banks
In response to dwot's blog ( http://caps.fool.com/Blogs/ViewPost.aspx?bpid=34751&t=01004034443672390362)
LBOs are, by definition, risky -- they tried to take advantage of an obvious arbitrage game. Now they are threatened by the simple fact that it was too good to be true.
Let's rejoice in the fact that Banks are actually waking up and realizing that its better to walk away. Let's embrace the fact that walking away from bad deals is a good thing, and not simply following through for the sake of following through! Reality is here! Yeee-haaaw! (I'm from Texas). This is a huge sea-change from what we've seen before. I see this as a great sign - Banks are actually taking a hard look at profitability and what it really takes to make the right decision.
THIS IS A GOOD THING, NOT A BAD THING!
We are in for a bear market, no doubt. If you hold an LBO stock, get out. But let's remember that the first step to curing additction is admitting you have a problem and taking a cold hard look at the situation. This is a wonderful sign of things getting better - which will take months to years to see the benefit.
Value investors take hold! We are getting a unique opportunity to witness a complete change in thinking by the banking community. It may be time to start going long on the financials.