Onyx (ONXS-Q)

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.

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.

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. 

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.