David Baskin Onyx ONXS-Q BUY Jan 10, 2007

Liquidate? He never recommends liquidating. He likes to scale. If you’ve had a good run and there are good profits, and some potential risks to the downside, then you cut a 3^rd. If it keeps going up, then you are still playing, and then you cut another 3^rd.

Public version of private equity business model.
Subject to volatility as a result of public listing.
Would prefer private equity investments in "private" investment vehicle.
Higher interest rates will be tough for debt involved in business model. 

ROIC is 7.7%, WACC is 10%. So right now, they're not generating the profitability he likes to see. It will work through over time so that at some point (from 2-5 years), they'll be profitable. Gets you into the private equity world. US deregulation should enhance M&A activity, especially if the Fed cuts another half a point. Good hold for the long term.

He owns BN instead.

Under pressure along with all the rest in private equity. Trouble finding liquidity for a lot of their deals. With rising rates, power is now in the hands of the lender, but private equity firms are huge borrowers. Stay away.