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Jeff Hooke, Johns Hopkins - The Buyout Business…Has Not Outperformed The Public Stock Markets For The Last 10 or 15 Years | #361

The Meb Faber Show - Better Investing

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The Basic Principle of Private Equity Investing

The buy out business, much to the surprise of some people, has not out performed the public stock markets for the last ten or 15 years. By putting in more debt, you couldin sthe equity returns. But as prices go up on an asset or an investment, the return ably drops. So that's been the case for the last 15 years. It's sort of been a well hidden secret. And it's just like if you bought a house for 200 sand dollars. You've only put 50 thousand dollars down in your equity, and the house is gone up by 25 thousand dollars. That's a 50 % return because you borrowed most of the money. Course, it works

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