It must have been hard for cautious executives to sit back and watch during the buyout boom, but it's looking pretty smart now: With the credit markets dried up, heavily-leveraged firms are finding themselves in a precarious position. Private equity firms are struggling to close deals they agreed to, watching some fall through, and wondering how a lot of the other ones will pan out.
But CEOs of publicly-traded companies who didn't get into the easy money game -- avoided excessive buybacks and stupid acquisitions -- are in a great place now: They have plenty of cash to scoop up bargains, and don't have to compete with any army of private equity firms like they would have had to a few months ago.
As Benjamin Graham and later Warren Buffett have often said, being fearful when others are greedy and greedy when others are fearful is the key to success in business.
Now that the private equity firms are getting fearful, it might be time for more strategic buyers to get greedy.
But CEOs of publicly-traded companies who didn't get into the easy money game -- avoided excessive buybacks and stupid acquisitions -- are in a great place now: They have plenty of cash to scoop up bargains, and don't have to compete with any army of private equity firms like they would have had to a few months ago.
As Benjamin Graham and later Warren Buffett have often said, being fearful when others are greedy and greedy when others are fearful is the key to success in business.
Now that the private equity firms are getting fearful, it might be time for more strategic buyers to get greedy.
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