KKR & Co. LP (KKR)

Just cut their dividend. This is not the time to buy Private Equity. Wait until it gets completely washed out with bankruptcies in the oil patch, when they go in and Hoover up for $.30 on the $1 and get phenomenal deals, and then build a portfolio. It is tough to invest in these things at this point in the cycle, because we haven’t had the washout.

They have changed the distribution in the last little while. Before they were paying out a lot of the capital gains on the balance sheet as well as the performance bonus. Have now decided to keep that in-house as they weren’t seeing the market paying up for that. With the dislocation in credit markets and equities, and the fear coming out of that, it is really going to impact this company. There is a lot of pain in the equity Price. But this is really the time of volatility where they get good prices, and really plant the seeds to grow the business on earnings going forward. From that standpoint there is a very good baseline yield. They are long-term assets they are collecting fees on. Likes the business and the alignment of ownership and the people that are making these bets in investments on behalf of investors, so she thinks there is a much higher share price coming.

Had previously owned this. A really good company, and really cheap. You should be fine to hang in here. Doesn’t think there is going to be a distribution cut. When there is a recovery in the stock market, this one is going to soar like an eagle. Dividend yield of 10%.

Are you investing in the business or trading in the stock prices? The important thing when being in the stock market is that you are investing in a group of businesses with an expectation of sharing in the profits in the form of a dividend. If the dividend is rising every year, then you are going to participate. If the dividend rises, then the share price will ultimately follow. This one is in the private equity area. M&A was great last year and pushed the stock up, but who knows what is going to happen in 2016.

Primarily the weakness is because the stock market has been pretty volatile. This has some exposure to energy companies. As well there have been some concerns over the high-yield space given the rising rates. Very cheap and very attractive. Trades in the $15 range, and $10 of that is Book. If you don’t need the money, he would be doubling down on this. Has a very healthy yield.

They harvest well, but a lot of it is priced into the market. He would stand aside. This is the wrong part of the cycle for them.

Sell for tax loss and buy back within 30 days? This had a big break downward this year after a bunch of years of basing, but has found support at around $17. He would take the tax loss, and then look around for a name that would be similar in case you want to stay in that space.

We are in the season of tax loss selling. A well-run company, however this is the kind of company where there is a very specific time to own it, and a time not to own it. Coming out of a crisis is a great time to own a company like this, and we are currently at the top of the cycle, and we need another crisis for them to go buy more and then turn around and monetize. You can hang onto this and watch, but there are better times in the cycle.

A private equity company. They invested in some oil properties that have done poorly in the last little while. Pays a good dividend which is pretty safe, because it is just a payout of their earnings from their business. Although interest rates are going up, they are still relatively low, and this company can still buy things and lever them up. The M&A and stock market continues to be fairly robust.

The company suffered because of a couple of major positions it has taken in the oil/gas industry. However, the rest of their business is still very, very solid. The distribution is not a dividend, but more of a distribution based on what they earn on some of their various funds. Relatively very solid. Might come down a little bit this quarter, but you are getting a decent yield. It is a very smart bunch of guys running this business.

Selling at about 1X his adjusted BV, which makes the stock fairly reasonable. It is sitting right in the middle of a long-term range with a top of about $25 and a bottom of about $12. Yield of nearly 10%.

(A Top Pick Oct 29/14. Down 13.48%.) A very cheap name and he thinks his thesis for buying it was correct. Still thinks and maintains that markets will be higher in 12 months. If that is the case, then you want to be in very inexpensive financials that are leveraged.

They are very talented investors. They have a good long term track record. They recently lost a lot of money in a partnership in oil and gas investments. It has affected their performance. Other than energy, they have had a very successful track record. What he does not like about this is the lack of transparency. He thinks the management pay themselves too well.

This is a good group to look at. The big challenge is performance fees and their ability to generate them. They monetize private investments and charge fees. In bad markets they tend to sell off. This one is down 35% from the peak. The numbers are not that great year over year. The revenue growth is flat. What he does like is the reasonably healthy cash flow and the buildup in cash on the balance sheet. The stock price is a massive discount to their book value. He would go for this here, but he feels the market is discounting a dividend cut. 9.6% yield. The group as a whole looks undervalued. You will probably see a recovery in these names in January.

(Top Pick Oct 29/14, Down 20.16%) Energy has sold off quite a bit and that has not helped them. If markets have a rally toward the end of the year, they should do well. It is not expensive. China and the Fed are the main things driving it.