Cutting Your Teeth

"Any fool can buy a company; you should only be congratulated when you sell." So Henry Kravis remarked in the WSJ earlier last week. If he is right, many of today's masters of the private- equity universe could be wearing dunce caps in a few years time. Source IBD.

Generally speaking, people have no idea how hard it is to run a big company. And the people that do only hold that position on average a few years at best (and then they are done for their careers.) So all the uproar needs to settle down over executive compensation...and focus more on all the companies that are in part dependant on their new owners and "managers" i.e. the very young, generally inexperienced and very under staffed private equity firms.

The leverage assigned to this new multi-hundred billion part of the economy is now very high. Future job growth and economic health to a large degree is tied to this new generation of ownership that is clearly cutting its teeth on a critical part of American finance.

It is hard to imaging with the rising cost of capital this pace can continue in 2007. Investors should be more focused on great public companies staying in their portfolio.

Danny Boy seen here enjoys the comfort of his current home before he too grows bigger and becomes more experienced.