Europe is, as the kids say these days, a hot mess.
Their economy is running well behind the United States, and parts of Europe like Italy and Greece are still pretty much in financial crisis mode.
The specter of BREXIT looms over the continent, and no one knows exactly how that is going to play out over the next year.
Last Friday, ECB President Mario Draghi said that the European economy was so weak that they would have to delay any interest rate hikes and might even have to add stimulus to prevent Europe from slipping back into a recession.
This is not what Eurozone bankers wanted to hear.
The slow economic growth has weighed on the big European and British banks, and the shares trade at distressed levels similar to where the big U.S. banks traded a decade ago.
All of the big banks across Europe trade below book value, and many of them are selling for less than half their estimated net worth.
Bankers had hoped that economic conditions would begin to improve by now lifting their share prices higher.
Instead, banks in the Old World fell by 25% as a group in 2018, and it has not gotten any better so far in 2019.
Anytime a sector gets this kind of negative attention from the markets, I get interested in putting money to work.
Last week I actually put on big boy clothes and dress shoes and ventured to downtown Orlando to take in a presentation sponsored by the CFA Society here in Orlando.
I am not a Chartered Financial Analyst, and I have something on the order of zero interest in devoting a few thousand bucks and three years to get a certificate telling me what I know about picking stocks.
I figure I can let the results reveal that story for me.
I have to admit that they really do host excellent events with good speakers, and last Thursday was no exception.
Dan Rasmussen of Verdad Capital gave a presentation on private equity and private equity replication strategies.
I have talked to Dan numerous times since I first read his paper “Leveraged Small Value Equities” back in 2015.
He has developed a strategy replicating private equity returns without the high fee structure that delivers outstanding long-term returns.
The backstory on his research is fascinating.
And it’s the behind-the-scenes details you need to know (and I actually use) to make a fortune.