[Zhang Fei]

[Warren Buffet says private equity is a scam. So many stories of struggling chains going Chapter 11 soon after going private due to high debt repayment. Only the suits and lawyers make out in the deals.]

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I tend to disagree. I think money managers feel inadequate because they are saddled with the image of people who don’t do anything but move numbers on a spreadsheet. It’s akin to the army logistics guy who envies the people in the combat arms. Problem is many money managers aren’t cut out for operations roles, have no knowledge of how to segue into that function, are incapable of learning. This is how Eddie Lampert the star money manager ended up running Sears/KMart into the ground. A man’s gotta know his limitations.

Running money is like doing one night stands. Running a company is like getting married. This mindsets and skills required are very different.

[who_would_fardels_bear]

I think he bought K-Mart and Sears for the real estate, but by the time he ran the stores into the ground as planned, the commercial real estate market went bust and he was left holding too much worthless property.