Brookfield Asset Management Inc., Canada’s largest alternative asset manager, said it’s selling off assets so that it will be ready to pounce in the next down market.
The Toronto-based firm sold about $12 billion in mature assets in 2017 and said it will continue to do so this year. Brookfield, which has $285 billion under management, said it has more than $25 billion in core liquidity and dry powder in its private funds.
“We see no signs of underlying economic issues, despite the U.S. economy being nine years into this expansion,” Bruce Flatt, Brookfield chief executive officer, said in a letter to shareholders. “While this economic cycle shows no immediate signs of ending, it is clearly in its mid- to later-stages of an elongated expansion, and so we are being cautious, preparing for less robust times.”
He said there was cause for caution with equity markets hitting record highs, government bonds historically expensive, corporate and high-yield spreads at record lows, and “bitcoin mania” taking hold, creating a market capitalization of $500 billion with “as far as we can tell, zero intrinsic value.”
"An Italian renaissance painting was recently purchased for over $500 million, an all-time high for the sale of a painting,” he said. “These all make us cautious, while still continuing to invest our capital.”
TLDR: BAM got spooked by "expensive" stocks and bonds, Bitcoin mania, and pricy paintings. This article came out before Berkshire Hathaway announced that they have about $116 billion in cash.
Disclosure: My largest holding of individual stocks is BRK.B, BAM, JNJ, NEP, and PEGI (currently downsizing). Smaller holdings consist of V, UL and RDS.B. Most of the money is in index funds.
Submitted February 24, 2018 at 01:03PM by COMPUTER1313 http://ift.tt/2GJdr0T
