Private Equity used to make money like bandits, this is how they did it

I came across Dan Rasmussen on Meb Faber’s podcast this week. Dan runs Verdad, an investment firm which seeks to invest in leveraged small value (i.e. low multiple) stocks. The research behind his approach you can find here.

In essence, Dan’s thesis is that the reason that private equity beat the market by 6% per annum after fees in the 1980s and 1990s, was its ability to:

  1. Buy cheap firms (i.e. less than 6x EBITDA)
  2. Use leverage to amplify returns

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Who will profit from the decriminalisation of marijuana?

Social attitudes to marijuana have shifted quickly. The global movement towards decriminalisation will dramatically change the nature of the legal marijuana market. Who is best positioned to “win” in this market? Continue reading