Yesterday was a tough day in the markets, with the Dow falling 199 points. But, if you follow some of the legends of finance – such as Carl Icahn, T. Boone Pickens and The Blackstone Group's (NYSE: BX) Steven Schwarzman – you will notice that they are getting aggressive.

Keep in mind that these guys have been through multiple market cycles. And, if history is any worthy benchmark, it's during times of instability where the big money is made.

Pickens is focusing on the energy industry. He sees major demand/supply imbalances and is buying various stocks. He is also interested in natural gas and alternative fuels.

As for Icahn, he's doing what he does best – shareholder activism. He senses when companies are vulnerable and seems to relish an attack on corporate managements and boards. Of course, he's gearing up for a fight with Yahoo! (Nasdaq: YHOO). Interestingly enough, he persuaded Pickens to buy 10 million shares.

And, with Schwarzman, he's buying up the bank debt of companies that went private. Because Blackstone sees many deals, it has an extensive database of opportunities.

In other words, the legends of finance are confident in the long-term. They are making some big bets -- based on lots of experience and due diligence -- and not listening to the short-term noise. All in all, these are some valuable lessons for investors.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

No doubt, Barack Obama is an amazing speaker. Even his opponents grudgingly agree.

Yet he has misspoken on several occasions. His comment that mentioned "bitter" Americans took a toll on his campaign. And he is being lampooned in the blogosphere and on talk shows for his slip that he had visited all "57 states."

Entrepreneurs can learn from his talents -- and his slip-ups. In other words, when making a pitch -- or a speech -- you need to be very careful what you say. You need to think like a politician.

Of course, even top business leaders can make big-time blunders. Just look at Steve Schwarzman, the CEO of The Blackstone Group LP (NYSE: BX). At a private investor conference, he said the following about his aborted $1.7 billion buyout of PHH Corp. (from a piece in the NY Post):

Trying to buy a mortgage bank in the midst of the subprime crisis was the equivalent of being a noodle salesman in Nagasaki when the atomic bomb went off. Not a lot of noodles left or even a person -- and that's what happened to us on this deal.

It was certainly a puzzling and unsympathetic comment.

So-called "trader talk" can be pretty rough. After all, Wall Street can be stressful (especially lately).

But, when you are the CEO of a major financial services company, you are expected to keep your language PG.

Well, Steve Schwarzman -- who is the CEO of The Blackstone Group, L.P. (NYSE: BX) -- perhaps didn't get the memo. Actually, maybe he thinks he still runs a private firm.

In a recent investor conference, Schwarzman was quite colorful in describing it's aborted $1.7 billion buyout of PHH Corp. (which got ensnared in the subprime mess).

It's been three weeks since our Money Face-Off feature ran here at BloggingStocks and on AOL, offering you the opportunity to share who you though had the financial edge in a series of twenty head-to-head match-ups. So I thought I'd take another look and see how things have worked out.

It's hard to pick just one big winner. In terms of the largest lead over a rival, Ivanka Trump easily beats Paris Hilton with 89% of the vote. Others holding big leads over their opponents include Tiger Woods, Warren Buffett, Steven Spielberg, and Rupert Murdoch.

In terms of receiving the most votes, the clear leader is the Oprah Winfrey vs. Martha Stewart match-up, with just short of 150,000 votes. Other big vote getters were Tiger Woods vs. David Beckham, Rudy Giuliani vs. Michael Bloomberg, and Bill Gates vs. Steve Jobs. In terms of the liveliest discussions in the comments, the winners are Oprah Winfrey vs. Martha Stewart, Erin Burnett vs. Maria Bartiromo, and Bono vs. Angelina Jolie. Also check out the comments for the J.K. Rowling vs. J.R.R Tolkien, Tiger Woods vs. David Beckham, and Ivanka Trump vs. Paris Hilton posts.

As for the face-off posts here that got the most attention, the clear winner is Erin Burnett vs. Maria Bartiromo, with more than 13,000 hits. Lindsay Lohan vs. Britney Spears and Oprah Winfrey vs. Martha Stewart also attracted lots of readers.

Results for all the face-offs follow below, but keep in mind that the voting is still open. It's not too late to add your vote or let us know what you think.

It's been a week since our Money Face-Off posts ran here on BloggingStocks and less than a week since the Money Face-Offs were featured on the AOL welcome page, and the response has been terrific. Many of the face-off polls have more than 50,000 votes thus far, and some of the match-ups are very close.

The closest of all is the face-off of CNBC anchors Erin Burnett and Maria Bartiromo: 50/50 with more than 61,000 votes so far. And the post has garnered 39 comments so far. The commenters have strong opinions, whether defending Bartiromo or Burnett, wishing other anchors had been included, complaining about the photos, or even questioning the Money Face-Off feature itself. Be sure to check it out.

The face-off between the former and current New York City mayors, Rudy Giuliani and Michael Bloomberg, garnered more than 67,000 votes. While Bloomberg has his defenders, presidential candidate Giuliani currently has a small lead in this match-up, with a little over half the votes. Can he hold on to that lead, though?

The match-up of supermodels turned businesswomen, Tyra Banks vs. Heidi Klum, also has more than 50,000 votes so far. In this case, it's Klum in the lead with about 55 percent of the vote. Only one reader, a Tyra Banks fan, has commented so far. Feel free to add your thoughts about which former supermodel you think is more successful.

As I posted last month, Blackstone Group's CEO Stephen Schwarzman gave an interview to the Wall Street Journal with a compelling theme -- Schwarzman is the Napoleon of private equity. Napoleon-watch tracks his moves on the business battleground.

The New York Times reports that Blackstone Group LP (NYSE: BX) is making things tough for itself and its peers in the eyes of Congress. That's because Blackstone used a loophole to avoid paying tax on $3.7 billion -- most of which was raised in its IPO last month.

Although they will initially pay $553 million in taxes, Blackstone's partners will get that back, and $200 million more, from the government over the long term. In a nutshell, the partners used the writeoff of goodwill -- the difference between the book value and market value of an asset -- to shield their gain from tax.

The details are rather complex but fiendishly clever:

• the Blackstone partners paid a 15% capital gains rate on the shares of Blackstone's management company they sold last month in the IPO
• Blackstone then arranged to get deductions for itself for the $3.7 billion worth of goodwill at a 35% rate. They taxed low and deducted high.
• The deductions must be spread out over 15 years. And the original Blackstone partners are getting just 85% of the tax savings, leaving the other 15% to outside investors. The deductions on the $3.7 billion to the partners are $1.1 billion over 15 years.
• If these tax savings were paid as a lump sum this year, the partners would get $751 million, which is $198 million more than the taxes the partners will pay on the $3.7 billion of goodwill.

These guys didn't get to be billionaires for nothing. Meanwhile my proposal for putting half their pay in escrow for 10 years to cover the costs of bad deals is gaining tiny amounts of support.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Blackstone.

Investors who worry about tax increases, socialized medicine and Hillary Clinton picking out fabric swatches, should be petrified by the recent polling data showing how low President Bush's popularity has sunk.

A recent NBC/Wall Street Journal poll showed that by a margin of 52% to 31%, Americans want the Democrats to win the presidency next year. Politico.com is reporting that "Republicans across the country are warning that increasing public discontent toward President Bush, the Iraq war and the GOP brand in general threatens to send the party's 2008 campaign planning into a tailspin."

Even though the economy is fairly strong and the stock market continues to set record after record, Wall Street seems out of step with Main Street. People are fed up with high gas prices, the war in Iraq and the bursting of the real estate bubble.

They also don't like corporate fat cats either, so Blackstone Group LP CEO Steve Schwarzman, who stands to earn as much as $677 million from the private equity firm's upcoming IPO, might want to watch how he spends his money before the election. For instance, he should avoid lighting cigars with $100 bills.

Members of Congress are already grousing about the favorable tax treatment that hedge funds and private equity companies enjoy, which was underscored by the Blackstone IPO. There will be more and more complaining about private equity and hedge funds over the next few months.

In fact, there will be such noise about issues of interest to investors ranging from taxes to free trade that it will be difficult to figure out what to believe.

About the only thing that's for certain is that big changes are coming.

This morning's Wall Street Journal [subscription] scored a coup -- an exclusive interview with Blackstone Group's (prospective trading symbol BX) CEO Steve Schwarzman.

The interview's theme -- that Schwarzman is the private equity industry's answer to Napoleon -- did not delve into the question of whether it makes sense to invest in what Schwarzman is selling to the public. But it did include some fascinating personal details:

• At 5' 6" he is a "little man" who wants to "inflict pain" on and "kill off" his rivals;
• He noticed that one of the servants at his 11,000 square foot Palm Beach mansion wore squeaky rubber soled shoes;
• He ate $400 worth of stone crabs there during his 15 minute lunches; and
• He neglected to invite his rival -- KKR partner, Henry Kravis-- to his lavish 60th birthday celebration -- to which a huge portrait of Schwarzman, which usually hangs in his living room, was shipped -- because he had never been invited to Kravis's home.

Should you invest with him? Yes. However, the securities he's selling in the Blackstone IPO will not enable you to do so. I have been plowing through its prospectus and have come to the conclusion that you should avoid these securities. Here's why:

Wow! That was my initial reaction when I read the Bloomberg News story about the pay accruing to Blackstone Group's top executives. And yet, compared to hedge funds, these guys are lightweights. When you look at their photos, though, you can only come to one conclusion -- it pays to be bald!

Blackstone Group LP co-founders Stephen Schwarzman and Peter G. Peterson will get $2.33 billion and keep 28% of the company after its planned initial public offering. That was interesting but what really got my attention is their pay -- Schwarzman made $398.3 million last year and will own Blackstone shares worth $7.7 billion while Peterson took in $212.9 million in 2006 and will own $1.31 billion worth of stock after the deal is done.

This seems like a nice payday but it depends on whose you compare it to. Schwarzman's pay is about 7.4 times that of Goldman Sachs Group Inc.'s (NYSE: GS) CEO Lloyd Blankfein -- who made only $54 million in 2006 and 6,638 times that of the average U.S. family which pulled in $60,000 last year.

Yet Schwarzman's $398 million is less than a quarter of the $1.7 billion that top hedge fund manager, James Simons, pulled in last year. Do you feel sorry for Schwarzman now?

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Goldman Sachs.

Blackstone Group will sell 10% of itself [WSJ subscription required] to China's new investment arm prior to Blackstone's initial public offering (IPO). If there was ever an example of how capital is reducing the importance of national boundaries, this is it.

This Blackstone investment -- for a non-controlling stake -- is clearly a bargaining chip in the economically tense relationship between China and the U.S. We need China, since it's financing a big chunk of the $8.8 trillion U.S. federal debt -- it owns $350 billion worth of U.S. Treasury securities.

But China also accounts for a share of the politically sensitive U.S. trade deficit. And due to what Treasury Secretary Hank Paulson considers China's artificially low currency, this trade deficit is not going away. Somehow China, which is coming to the U.S. for trade talks, thinks that having its State Investment Company buy $3 billion worth of Blackstone Group at 95.5% of the IPO price will mollify its critics.

One thing for sure -- China's stake will help Blackstone avoid the problems that Carlyle Group encountered in its efforts to buy companies in China. I guess China would be better off if Blackstone owned the U.S. government. Then again, given that Steve Schwarzman raised $1.2 million last month for Republicans during a New York fund-raiser at his 34 room apartment featuring his Yale dorm mate -- George W. Bush -- maybe China's investment in Blackstone is Bush's payback for Schwarzman's fund-raising.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.