Basicaly, the Private Equity guys became trend followers, and not contrarians. When you have that much money at your disposal, you should never pay ‘UP’, you should be modelling and researching broken companies and industries, waiting and thinking. Those of us with little money should be doing what they were doing. All they did in this cycle was make the trend more pronounced and end many great stock runs with an exclamation point…to the upside (thank-you very much).

By the way – I love the New York Times. Love it more now that it is free. The design is so easy on the eyes. Best on the web to get you reading below the fold.

This week in New York more people than ever in the ‘biz’ told me I should be reading Dealbook. Than I met Andrew at an IAC Founders party. Thanks Dina for the invite. Andrew created it. He now has a pretty cool freaking job. He is funny and smart and I am happy he respects ‘off the record’ at least so far :) .

I don’t know about that middle name thing…but it is the ‘Times’.

While Cramer and CNBC try to get your interest rate down 1 percent, the stories with REAL growth sneak right along.

Priceline has been en fuego (I thought they did not exist anymore :) ). Shatner won’t die !

Amazon – checkamundo

Ebay – Rocking – not sure why

Blue Nile – oh my!

Google – search me

Baidu -Find shit in China

No wonder Cisco and Juniper are on fire.

Back to Yahoo – Yahoo is still in the doldrums, but anything could happen. Maybe the private equity guys will make a move into the internet musiness and surprise a few people.

I thought Private Equity guys had tons of ANALists in back rooms crunching numbers. The goal being to find cheap stuff, that no one understood, steal the conmpany at a time of turmoil, fix the company, and ride out big gains before an exit. Like buying Hilton after 9/11 in the low teens. Maybe in 2003 in the low 20′s.

Not today I guess. Now, they surf the all-time high list, figure out how to structure wicked fees and than flip to a foreigner in a momentum fund sort of way.

I am a simple trend follower and Hilton (HLT) was already flashing a BUY as it was hitting all-time highs recently. I have no staff. I have a widget for this. At Wallstrip , we covered Morgan Hotels as a play on the Hotel Space. Increased travel and a cheap dollar have definitely helped this trend. Blackstone is betting on surging real real estate prices continuing, a continuing cheap dollar and no travel hiccups. A risky bet I think after such a great run. Time will tell.

I would hope that if I had enough money to give to Private equity Firms, that this was not the best deal they could find today. I am not saying that Hilton is not worth $100/share per se, it’s just that I would expect Private equity forms, especially one that is supposed to be ‘the best’, to focus on a different list than me.

Morgan Hotels is up 5 percent on the Hilton News, so I am happy they are not :) .

Congrats to those long Hotels and especially Hilton. Look for the merger trend to continue (something I have been blogging about for 18 months ).

Ben Stein (Bueller…Bueller) had a great piece today in The New York Times that really struck a chord. My favorite excerpt:

When yeoman farmers sent their savings to banks in London and Glasgow and Paris, they had to be able to count on it not being stolen. That was what allowed capital to be accumulated and deployed, and for the entire world economy to take off.

These misdeeds and many, many more are hammer blows at the granite foundation of trust we built in the 1940s and ’50s. How long democratic capitalism can survive these blows before it gives in and gives birth to revolution or to an out-and-out aristocracy, I am not sure.

We are killing ourselves with the shennanigans.

Is the answer putting Steve Job’s in prison for options backdating? Not sure. Killing all the private equity suits…maybe :) . Time will tell. In the meantime, it is wise to take more responsibility with your hard earned money.

It is too early to tell whether they are stupid prices, but surely both companies could have been had 2-3 years ago at fractions of their cost. So who really is a trend follower and why pay up?

I have to be honest, the bankers suck. They have the analysts, resources, information – the connections to get these deals done at better prices but instead of doing their job, they have become order followers of ego driven corporate management teams.

They see industries and stocks on the rise and they pay up. Chase Manhattan is my favorite bank because they are not ashamed of what the do and have taken the name :) . They Chase clients, accounts and deals.

Of course there are some smart private equity guys, but they do homework. They look for deals and give the marching orders to banks.

Banks are too lazy and poorly structured to find great new ideas because they are chasing industries on the move. They have become momentum hedge funds that make stocks overshoot on the upside and overshoot on the downside.

Until something changes, trends will take prices higher much faster and the same in reverse. It is a good time to be a trend follower despite the low volatility.

No wonder the Private Equity market has exploded in the last 5 years.