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The "Smartest Money" Is Liquidating Stocks At A Record Pace: "Selling Everything That’s Not Bolted Down"
Just over two years ago, at the Milken global conference, the head of Apollo Group Leon Black said that "this is an almost biblical opportunity to reap gains and sell" adding that his firm has been a net seller for the last 15 months, ending with the emphatic punchline that Apollo is "selling everything that is not nailed down."
Roughly at that time the great stock buyback binge began, which coupled with two more central banks entering the stock levitation "wealth effect" bonanza, provided ample opportunity for the biggest asset managers in the world to sell into.
But while we knew that both "vanilla" institutions and hedge funds were actively selling in the public markets, it was not until last week when we got the most candid glimpse of just how much. We described it last week when citing Bank of America who said that "BofAML clients were big net sellers of US stocks in the amount of $4.1bn, following four weeks of net buying. Net sales were the largest since January 2008 and led by institutional clients—after three weeks of net buying, institutional clients’ net sales last week were the largest in our data history."
Today, we got definitive confirmation that the truly "smartest money in the room", those who dabble not in the bipolar public markets but in private equity had indeed started "selling everything that is not nailed down" several years ago hitting a climax this past quarter, when Bloomberg reported that two years after Leon Black's infamous statement, "other private-equity firms are following suit - dumping stakes into the markets at a record clip."
According to Bloomberg data, firms including Blackstone Group and TPG have been "capitalizing on record stock markets around the world to sell shares, mostly in their companies that have already gone public. Globally, buyout firms conducted 97 stock offerings in the second quarter, more than in any other three-month period."
And who are these core investors selling their equity stakes to: mostly to the companies themselves...
... but what's worse, as directors and ultimate decision-makers, they are forcing their very companies to lever up even more to fund these buybacks of "insider" stock!
Since Black made his comments in April 2013, the MSCI World Index has gained 18%, stretching valuations even higher. Bloomberg adds that "headwinds that threaten to rattle global equities are everywhere -- from the Greek and Puerto Rican debt crises to an eventual increase in U.S. interest rates" but in a world in which central banks are the first and last backstop to a market drop, there is "no risk"... which is why the insiders are taking every advantage to liquidate.
"It’s clear that we are currently in an environment of frothy valuations,” said Lise Buyer, founder of IPO advisory firm Class V Group.
Her disturbing punchline: "The insiders - those with the most knowledge - are finding this a very good time to take some money off the table."
This year, private-equity firms sold $73 billion of their buyouts to the public, a record amount over a six month period, Bloomberg data show.
Some examples:
The biggest such deal this year came in May when Blackstone sold 90 million shares, or $2.69 billion worth, of hotel-chain Hilton Worldwide Holdings Inc. in a secondary offering. Blackstone took the company private in 2007 for $26 billion and did an IPO in December 2013, raising $2.7 billion. After the latest sale, Blackstone’s stake in Hilton fell to 46 percent from 82 percent before the IPO, Bloomberg data show.
The largest European exit so far this year was the $2.46 billion IPO of online car dealership Auto Trader Group Plc in London, where Apax Partners sold shares. In Asia, private-equity firm China Aerospace Investment Holdings Ltd. sold 2.3 million shares in a $2.12 billion IPO of China National Nuclear Power Co.
Which leads to a paradox: the PE firms, now focused on selling the remainder of their equity positions in massive peak credit bubble LBOs from the 2006-2007 period via secondaries have nothing left to take public, and as a result they’re doing fewer initial offerings: PE-backed IPOs have had the slowest start to the year since 2010, selling $8.2 billion in stock.
The reason: "many of the larger companies that were swooped up during the buyout boom that ended in 2007 have already gone public. Today’s selling is largely private-equity owners getting out of those assets."
“It’s been a lot more about harvesting public positions than creating new ones through IPOs,” said Cully Davis, co-head of equity capital markets for the Americas at Credit Suisse Group AG. “The markets are open and the financial sponsors are pretty astute about timing their exits.”
In other words, the insiders are not only selling, they are liquidating every last share they can find.
In an echo of Leon Black, Frank Maturo, vice chairman of equity capital markets at UBS AG, said, “Private equity is selling everything that’s not bolted down. With the robust valuations in today’s market, they are accelerating monetizations of companies they own.”
But what does the smart money know, anyway... aside, of course, from selling when they can not when they have to.
And now back to CNBC and their paper-money "trader" talking heads saying there is only upside from here to eternity. Let's see if we have these right: "the money is still on the sidelines", "there is a wall of worry", "Greece is a dip-buying opportunity", actually "everything is a dip-buying opportunity", "stocks are not a bubble, it is bonds that are a bubble", "the economic recovery is just around the corner" and "99% percentile valuations are just slightly stretched if you seasonally-adjusted them enough times."
That about covers it.
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if you're given the choice between Armageddon or tea, you don't say 'what kind of tea?' http://www.philiacband.com/propaganda.html
It doesn't matter, when they sell the PPT is close by so as not to let the market drop. There shall be no warning when the shoe drops.
"Since replaced by trillions in free cash flow...discounted
None of this matters.
Where are the institutions putting the proceeds of their sales?
depends on what you bolt down with...
http://www.businessinsider.com/giant-vortex-draining-lake-texoma-2015-6
smartest money is selling? so, two things;
a- we must assume the smart money was in the market, for starters.
b- where the fuck is the dumb money?
c- now there are mandatory intelligence tests before you can trade stawks?
d- i should have quit after a.
im going to go back to my white silence. ta-ta!
Channeling Butt-Head: "YTD cum flows"...heh heh heh heh heh
Now's the time to get out of stocks and precious metals. Gold is going to shit the bed. The dollar is king, and deflation is here to stay.
no shit maynard, deflation the main coarse whilst the desparados beg for cash. lump of gold means nothing to the majority. only royality gives a shit and they are in lala land. anyways, tyme to give this day a go...
You should be running...
Exactly.
Most likely money market funds will lock-up during the ‘crisis’ phase. None of us will be buying the low.
yerp, PPT will print money and buy every stock until the govt owns every share in every corp. Then they wont even be able to pretend we're not in a socialist nightmare
Is Charlton Heston still dead? Buy Soylent Green, don't wait on the dip.
These days listen for the flip flop to fall. No one can afford shoes.
No shoes for you!
--Union Army
https://en.wikipedia.org/wiki/Battle_of_Gettysburg
I'lll say. "Talk about missing out on massive gains."
This is the biggest energy and tech boom in history and his "buyout firm" wanted none of it.
Not that the dollar hasn't soared in value "as he went to cash." But debt markets have gone positive nowhere while the entire commodity space has been annihilated.
BTW the Cavnadian Dollar got annihilated today for those "keeping score."
Hard to see that getting any better once the Fed starts raising rates this Fall...
They ain't gonna raise any rate,today, tomorrow or any time soon. The game is Greece now and whose gonna go in an loot the gold bullion, spiriting it back to Brussels (shhh Switzerland refineries) just like Ukraine, just like Iraq. Just like...yawn zzzZzzzZzzz
Washington always goes for the gold. And usually gets it. Except in the case of Russia, and that has got them really pissed off. Maybe even enough to start WWIII. Either give up your gold to them, or else.
As for selling stocks. Smart money buys and sells all the time. They get all the inside information from the Fed and from Corporate CEO's. Buy backs and QE are signaled well ahead of time to the elites. They trade on knowledge, others trade on their guts.
you do if the ones offering you tea are the same motherfuckers who told you to drive down the road to armagedon because it was safe in the first place
**AHEM**
Not since Lehman......somebody had to say it
You say 'What kind of armageddon?'
YTD "Cum" flow...hmmm
haha, indeed. Cum flows.
"...That about covers it"
lol
So who are they selling to???
Money streaming out of Europe and China, looking for safe ground. When the music stops, someone is going to be wthout a chair. As a matter of fact, they may find there are no chairs at all.
they're selling Picassos and 100mil apartments in NYC and bugout mansion/bunkers in the Ozarks and SHTF mega yachts anchored in Southern hemisphere...............that's where money is goin'......GTFO dodge time
"Exit rather too early than a nano second too late" wisdom rules.
what would Kaitlyn do?
Tuck he/she cock and balls back between he/she legs and dance like it's 1976.
....and after the hot & sweaty sexual gyrating on the dance floor fueled by designer drinks from the bar, lil' Bruce may pop up in excitement and scare the shit out of Caitlyn's dance partner.....and that surprised dance partner is gonna be really pissed off.
All this time I thought fraud was a crime
An IPO, Kaitlyn, Inc.
A WHOLE lotta TEABAGGIN'? ...just a guess!
Are these the same "private equity" guys that haven't beaten the S&P 500 or a drunken monkey throwing darts for how many YEARS NOW ???
So why so we believe they finally have it right this time ?
I don't care which way the stawk market goes, I continue to go long on Food, Ammo, Wiskey, and Gold. Screw em.
Yep, same wizards.
Are these the same "private equity" guys that haven't beaten the S&P 500 or a drunken monkey throwing darts for how many YEARS NOW ???
Yes, reading the Blackstone/Hilton stuff above - they took it private for $27 billion, sold a chunk for $2.7 billion, sold another chunk for $2.7 billion, and that leaves them holding roughly half of a company with a current market cap of $27 billion.
In my arithmetic, $2.7B + 2.7B + 13.5B = 18.9B << 27B.
That's the kind of performance that people fall all over themselves to pay 2+20 for?
OK so they're so smart where are they putting their money? In bonds? Overpriced NY condos? We'll see who the smart ones are when TSHTF.
Gold and Silver shorts !!
Q: "How far can this plane go with just one engine?"
A: "All the way to the crash site"
and that plane will crash about twenty minutes before the EMS workers get there
Gotta love tater
Uh, that's THE tater. FYI
Profits are made and players get played when smart traders fade the most popular trade.
so, sell everything in the 401k and hold cash???
This is why I have such a hard time with the 401k scam. There's no one that says "that's it take this guy's money out now and put it in a bank account". These 401ks seem like a big ass slush fund for smarter people that can pull out their money but keep investing the money of people that simply think "the market will always go up". No one with a 401k even knows who is investing their money, making decisions and more importantly making sure their investment is protected.
People don't understand that in 2008 when their 401k was cut in half they didn't just "lose the money"...someone took it. How can you be so naive?
Then if you want to pull your money out when you see things going badly you have to pay a huge "fee" to the government and all your back taxes? What is this shit, these people tell me to put my money into a 401k...fuck off.
My job puts money in this thing.... I dont.... its part of my compensation.... I dont really consider it mine cause I dont think I will ever see it.... but on the off chance I do, I want as much as it can be....
What happens when it goes to 0?
well, trying to avoid that if possible but.....
I understand, when I said "you" in my previous post I wasn't necessarily referring to you it was a generalization. But seriously, think about taking some out and putting it in something that can't be used as collateral by criminals.
Weed, whites and wine.
leaving a 401 for plunder is as stupid as greeks leaving their money in banks-imfo.
pay the 10 percent, report it as income and pay off the mortgage or buy a tangible asset.
no charge for this advise. fidelity makes it extremely difficult. had to transfere it to td amer. and then i finally got the check. money has already been invested in recreational land and i have recooped all my penalties and tax paid. and best of all, i can go up to my shack and hang out wait for doom and gloom to come of age whilst i be grovey in da woods(don't cha no), ha-lol and plez donate a nailgun to a ceo or banker. drop sites are any tbtf bank; ie citi, jp wells ect.
good day to ya...
I'll be willin'.
I'm in the same boat with my 401k. My employer puts money into it as part of my "pay" but I don't contribute anything extra from my paycheck. I looked into withdrawing it but you can only take a "loan" from it if you prove some sort of financial hardship. You could also withdraw it to use as a downpayment on a primary residence. I had been planning to do that, but homes are insanely overpriced in my area.
If anyone has a suggestion for how I can get ahold of those funds I'd love to hear it.
I'm with you BC. People look at me like I'm an idiot when I tell them I stopped putting money into my 401k. I save for retirement, just not via 401k.
i work for a 401k company and have to be around thinking about it 8 hrs a day
and guess what I don't give a penny into it.
Think I will start when there is a huge correction out there, but until then fuck no
rather invest in metals
The problem I have learned the hard way is that once you put money into the 401k you lose control of it. Any nonapproved uses of it result in huge penalties and higher taxes than if you had just saved it. I cut back to the minimum match which gives me a one year gain and that is all.
There is also the bet on whether taxes will be higher or lower when you retire. Look around at the unfounded liabilities and tell me if you think taxes will go down in the future, at least if you are in the productive class.
The Smart Money left the table and was either buried in a coffee can under the big oak tree, or was converted to tangible assets.
All thats left now are the 2am drunks in the casino, pulling levers on the slot machine getting served 'free drinks' (employer match) while they gamble away their net worth.
I get asked for advice re 401k/IRA/SEP from tax clients, especially when they want to whiddle down their check to IRS.
It would be a stretch to say 15 percent of them actually 'get it'. They do make some funny faces when being advised against it. All they care about is current year tax bill, every fucking time.
Once I got out of the 401k racket I never looked back. I paid my taxes and never put another penny n. No regrets (about getting out.)...and it only hurt a little bit and not for too long.
Ideally, you only invest what you can lose.
This means, you should probably have a paid off house before contributing to a 401K.
At least you can burn the house for spite. Who do you shoot for a 404 error?
My 401k is gold and silver, I can burn down the house and it will survive.
ZH heads tout gold as if it is unassailable. It's just another investment that can go up or down like the stock market. Speculation, psychology, social mood moves the price. Last year worth $1800/oz. Now $1200/oz. Like any other investment vehicle, it's only worth what the next guy is willing to pay.
The only difference is that gold/silver have a 5,000 year history of being valued. No other investment vehicle can say that.
Gold is only considered "just another investment" by speculators chasing $$$$. I think most people here underrstand that the true value of gold is its role as insurance; as such, we measure its value in troy ounces -- not dollars.
No. Not Fed-confetti. Or gold. You want to invest your money in economies whose best years are ahead of them, not behind them.
Foreign stocks are a good hedge against hyperinflation---that's how the wealthy survived Weimar.
A global economic meltdown will be inconvenient for me. However, it will be considereably less inconvenient if it can wait till September, as I will be debt free and done with my honeymoon by that time.
I recognize the world does not move according to my desires, but it's nice to think so.
Chance favors the prepared mind......
Very inciteful
At first I thought you meant insightful...you got me
You may be in luck. See also September 23rd
It would be extremely convenient for me. It will utterly vindicate me, and crush all that would oppose me.
Mainland Chinese will buy. They are expert savers but poor investors.
It's interesting that Asians have such a huge penchant for gambling I mean, I know non-whites in general are extremely susceptible to it but Asians generally have high IQs so it's odd.
Liquidate your semen stat........
Praises to be our new yellow masters who have been hired by Talmud inc to dispose of the filthy hitey goyim. Sell everythng burn everythg we shall all have our revenge on the whitey!
Obama says what happened in Greece will not happen here....Which means...IT WILL HAPPEN HERE! love u guys, and I dont give a shit anymore....
p.s. Jesus is cool...you dont have to sign up for a website, or invest any money. Unless of course, you GO TO A CHURCH! lol...
Here is the real Dow.
http://www.showrealhist.com/recDJIAtoRD.html
Estonia is pretty fucking worried right now.
Unfortunately this ain't true, speaking in market terms and cumulative orderflows. They are buying like drunk guys pressing the buy button blindly. And it's so huge that it is impossible to be amateurs or people not knowing what they're doing. Go with it or stay still on the side lines
Unfortunately this ain't true, speaking in market terms and cumulative orderflows. They are buying like drunk guys pressing the buy button blindly. And it's so huge that it is impossible to be amateurs or people not knowing what they're doing. Go with it or stay still on the side lines
If all the "smart money" is selling like zerohedge emphatically declares in this article then that MUST mean there will be "money on the sidelines" so as to when any market sell off occurs there will actually be people there to buy.
The latest ZH thesis is that the only people buying were companies themselves (through share buybacks) so who will be there to buy when the companies (faced with higher interest rates) are forced to dump the shares back into the market....
Well....if hedgefunds have been dumping, retail is dumping, and institutional is dumping...won't those same people be there to BUY when corporations are dumping back into the market?
I think selling is a misnomer, they're selling stocks but that doesn't mean they aren't buying other assets, real assets like property.
But that's not true.
https://research.stlouisfed.org/fred2/series/USHOWN
Yeah but isn't that home ownership for individuals not corporations? Renting is the new normal.
This is where ALL the "money on the sidelines" is locked up?
https://research.stlouisfed.org/fred2/series/PRFIA
Or you can look at the $dxy and see that people are clearly hoarding dollars.
....dollars they will use when the market goes down "x" percent.
https://research.stlouisfed.org/fred2/series/REVOLSL
The Fed is hoarding dollars that's for sure.
Run, rabbit, run.
They're called the "smart money" because they buy very,very, very LOW. Usually sickeningly LOW.
Tyler - how hard can you keep beating that dead horse?
Which horse? Are you upset that ZH drives home the fact that institutional money takes advantage of their clients? Or the fact that Greece is a big deal that will not go away? Or that debt is saturating investment? Or that the gold price is manipulated?
Which horse, pray tell!
Gold price is manipulated?
A little bit.
Gold Price Manipulation Was "Routine", FT Reports -http://www.zerohedge.com/news/2014-06-03/gold-price-manipulation-was-rou...
And in the name of stability.
Executive Order 12631--Working Group on Financial Markets
http://www.archives.gov/federal-register/codification/executive-order/12...That was a joke.
Gold price is being manipulated worse than Libor and Forex. The AIIB were going to take control of the Gold markets at one of the recent blood moons but it didn't happen for some reason.
This article is bullshit. Private equity can't keep assets more than 7 years.
I
DO
NOT
HEAR
ANY
MUSIC
Smart Money will be sorry when the next bubble starts in the next little while, then they will jump in with both feet, and then the end will come. They will become like retail muppets.
This is going to be really, really, good.
Bullish on schadenfreude.
Kirk got out of Asia a month ago, using the principle of "He who panics early, panics best". Sitting in cash and PM (lost at sea).
My favorites were battles with the Borg. So relevant today.
Different Kirk, yet very relevant.
Kirk - Good for you! Another commentator also summed it up that its better to exit early than a second too late.
In my area of SW Florida bigger investors than I are gobbling up property for rentals. Now slim pickings from a year ago.
I think your OK in cash (for now), gold, property or land. These can go down a bit and likely will but far safer than stocks with outrageous P/E values.
Smart money? REEEAAALLLYY? I remember a certain quote posted here on ZH, at least a thousand times, in last year and 1/2, “the time to buy is when there’s blood in the streets.” - Baron Rothschild, 18th-century British nobleman and member of the Rothschild banking family
'
'
'
Selling to who?
The retail crowd left ages ago, or so it's been reported.
Is the 'Smart Money' selling to the 'Smarter Money?'
•?•
V-V
to, and for what? What good is a cash account in an insolvent financial institution?
FRN's not redeemable in gold. Savings accounts not redeemable in FRN's in any meaningful quantity.
The system is a black hole
Money is gold, Gold certificates made it easy to transfer ownership of gold in commerce. Is an FRN a derivative?
And may the odds be ever in your favour.
And central bankers and their cohorts are owning more of the world with each passing day.
What are the smart people doing with their money they have from selling their shares?
Let me guess. The smart money is drooling over a fire sale on Greek Islands.
The unedited version of this article;"smart jew money",is selling anything not bolted down,to "dumbfuck gentile money",right before the entire system implodes,again,for the third time this century..
Its gangsters. jewish, gentile, chinese, russian all , gangsters aided by the fed.
It's the color of your money, not your skin.
Yup, all the Joooz fault.
Fucking go back to smelling your fingers.
And I suppose the fact that all of the Fed Chairmen in modern history have been tribal is irrelevant?
Go back to drinking your Kool-Aid.
Another hater.
Got your signed copy of Elders of Zion right here.
You know you are right, I confess to hating a lot of things:
Tyranny, corruption, nepotism, parasitism and hypocrisy for example - all behaviors demonstrated by the cabal and used as weapons against my people.
Hate, just like love, is a good thing - as long as you hate the right things. It keeps you motivated.
Good to see that you have a copy of your roadmap, I doubt that you could find your way without it.
Indonesia bans dollar transactions.
http://rt.com/business/271018-indonesia-bans-foreign-currencies/
Smartest money my arse. It's not their own money, it's their clients money. So they just gamble on it. What is yours is mine, that's all.....
Distribution phase in equities, soon sell off and bear market. Start now to accumulate gold mining shares at fire sale price and gold bullion at low price, gratuity of the Fed,ECB and BOJ price suppression. We know that the smart people of Wall Street, are you gessing who they are? have been preparing this since 2012. Their plan has been skewed a little by the other smart people from the East who have been buying gold like crazy and have keep the gold price higher than they wanted, but still the plan is working as their MSM propaganda against gold continues anabated.
I would keep the sink. You might need it when things get so bad it makes you sick...
Get your ass into gold and silver before it becomes illegal.
Would love to...
...But my last two dealers took the money and ran without delivering.
Time to buy!
These guys can't sit on their hands doing nothing. They're addicts!
They are sniffing around desperate to put their money (of course it isn't really theirs) into something, anything.
even something stoopid would do, probably.