In a Private Equity State of Mind

With all the traveling and distractions this week, I didn't get around to reading Barron's all the way through until last night. The highlight was an interview with David Rubenstein, co-CEO of Carlyle Group (CG), the giant private equity firm. He made several interesting points, including the fact that one of the best opportunities is in the energy space. He told Barron's that carbon-based fuels are the most efficient and inexpensive energy source we have and as long as that's true, we will burn the stuff. He doesn't expect renewables to be a viable source in his lifetime. Neither do I. Companies that explore for, produce, transport and store oil and natural gas have not really participated in the market rally of the past few years and are very cheap. Long-term investors should be focusing on the group.

Rubenstein also talked about opening private equity to the public by creating vehicles for investors along the lines of limited liquidity closed-end funds, with monthly or quarterly redemptions. He correctly points out that private equity usually has higher returns than public markets over time for a variety of reason. I believe this is a horrid idea. Investors have proven that they will earn less than they should because they trade too much and are too vulnerable to news, emotion and price action. Private equity vehicles may return more than equity mutual funds, but investors will probably enter at the wrong time and exit at an even worse time, as they have done with other investments and strategies....543 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.