Is private equity the next market crisis? How we got here and what's next

CNBC Finance

31 min read

Did you ever wonder what made you pass on what turned out to be a sure thing? What made you thumb your nose at something that now seems obvious to have had real value when you dissed it? Was it all that difficult to see the opportunity? Or did you remember what happened in 2007, when bad debt overwhelmed decent equity and the center almost failed to hold and you prudently decided it was too dangerous to invest? Or you got slaughtered like so many others. It depends. Let's examine the most salient stressor we have seen in ages: The once pristine but now potentially poisonous tandem of private equity and private debt. Right now, Wall Street is beginning to be convinced that the stocks of private equity companies, historically among the best returning equities of the era, are all too toxic to own. There is a budding consensus that these companies, while good at their jobs of assessing credit risk, may have missed the mark when it came to judging credit risk of some tech companies in their portfolios. In some cases, they own the stocks of these riskier companies outright. In others, they own slivers of debt or equity in equally risky concerns that have been taken private by other private equity companies. They all seem linked by deed if not by name. At the same time the market is looking skeptically at how these companies, in another portion of their operations â business development companies â lent money to lots of small- and medium-sized companies that may not be doing as well as hoped or whose prospects have dimmed in the last year. These second "kind of" loans, which come under the broad rubric of "private credit," are easy to damn, because there is little information about them and lots of scary stories being told about them. The public stubs of these business development companies almost all trade with very big dividends, not a sign of strength, but a sign of stress. Some of the private credit loans may have been made to small- and medium-sized companies that banks passed on, perhaps because aggressive regulators didn't want the banks to make these kinds of loans because the banks would be using insured money of depositors who needed to be protected at all times. The skeptics regard these private equity lenders as "shadow bankers" because they do not need to meet the same standards as traditional depository banks. They are making "shadow" loans that may not be up to snuff to examiners if examiners were allowed to look at them. The more positively inclined backers of private equity just say that because these companies don't use Federal Deposit Insurance Corporation (FDIC) deposits to make loans they have more freedom to make bigger bets or bets that might be more difficult to understand but could end up being very lucrative. The federal government program was designed to backstop, insure, up to $250,000 per depositor, per ownership category at each FDIC-insured bank. The regulators look the other way at these entities, whether it be dangerous or not because they do not involve the use of insured public capital. There's a real caveat emptor here for the investors even if they have comfort because what they invest in seems tame and those that make the investments for them seem proficient and talented. It's hard to keep track of all the kinds of loans these companies make. The most traditional that you might know are the kinds where they take private a publicly traded company, fix it up, and bring it public again at a huge premium to what they took it private at. Historically, the best returns for these private equity companies under this model came from taking a company private that was very inexpensive. Right now, the traditional model has been stymied because of a recalcitrant initial public offering (IPO) market that rebels against this kind of private equity merchandise. The IPO market prefers far riskier equities, like all the crypto, nuclear, rocket ship, and flying car start-ups. It even likes special purpose acquisition companies (SPACs) more than private equity regurgitations. Private equity offerings, on the other hand, don't seem to represent growth or value so they go wanting or don't go at all. Therefore, these private equity firms are stuck holding companies that otherwise might have come public, maybe even years ago by their traditional standards. The public market cold-shoulder should have held down private equity firms' returns, but, somewhat amazingly, it hasn't hurt them. In fact, their overall returns have remained strong, in part because they know how to run companies well and don't mind holding on to them longer than they ever thought they would have to. Before I give you the bill of particulars that has put the group in the market's pessimistic crosshairs, despite that outperformance, I want you to recognize how stellar these companies really have been, and how strong they may be. Let's consider three of the best: KKR , Blackstone , and Apollo Global Management â all of which easily outperformed the S & P 500 over the last five to 10 years. These companies are run by some of the superstars of Wall Street. They are very hard to get a job at. That makes sense. They have superior returns to the stocks of most of the banks and investment houses over the last decade. I am amazed at how well they have done and how many billionaires these companies have produced. I marvel at the smarts of the people I have met at these firms and enjoy talking to most of them because they are so competent at what they do. I am mindful that when I got out of school back in the 1980s if you wanted to make the most money and gain the most prestige you applied to Goldman Sachs , Morgan Stanley , or First Boston, which was folded into Credit Suisse after massive losses. (No, not JPMorgan , which was considered distinctly second tier pre-Jamie Dimon, the current CEO whose words move markets). But for the last half decade procuring a job at one of these three private equity houses â KKR, Blackstone, Apollo â or at another of their number, Carlyle Group , may have exceeded the prestige and certainly the pay that you got by going into investment banking at any publicly traded, heavily regulated bank. They have drawn the current generation's best and brightest. (I am not including Carlyle in this piece because its stock has lost less than 10% in 2026.) Yes, they were always considered to be riskier places to work at than the tried-and-true brokers. But considering how many brokers have gone under over the years, maybe the market's been too critical of them. That's why, over the last decade, the price-to-earnings multiples of these stocks have been often far in excess of traditional banks, including those with big investment banking divisions. Remember, a high P/E is often a sign of respect, accorded to the best, and that's certainly the case with these companies. However, their stocks have performed terribly all year. Apollo shares have fallen 17% year to date, with KKR and Blackstone down 20% and 21%, respectively. Blue Owl woes The declines really accelerated this week when one of their number, Blue Owl Capital , more known for its private credit status than private equity, got rocked in a shuddering way. Created just five years ago, Blue Owl, a fairly new entrant in this rather cloistered world, has just over $300 billion under management. That sum is meaningfully smaller than KKR with more than $720 billion, Blackstone with $1.3 trillion, or Apollo with nearly $940 billion. But this Blue Owl outfit matters to the storyline. So, let's go deeper, so you know about its importance to the stock market before it perhaps bleeds all over the place like mortgage companies and mortgages did in 2007, in the lead up to the financial crisis that ensued a year later and the Great Recession Right now, Blue Owl has a publicly traded stock, OWL, that has dropped more than 27% for the year. It's going down harder than others because of fear that it can't make good on promises to redeem capital from one of several funds that it runs. The fund in question, known as Blue Owl Capital II, is what's known as a business development company. Business development companies are vehicles that lend to small- and medium-sized businesses. These kinds of loans are riskier than most loans that banks make for the aforementioned reasons. There is no stock attached to that business development fund; you can put money in â and, until recently, redeem it or take it out. But it doesn't have a stock that trades so you can't take your money out by selling shares. Right now, Blue Owl has decided to suspend regular redemptions. It is, however, putting in capital that goes to all shareholders, the result of a sale of some of the loans that Blue Owl has made to companies that are part of the portfolios their business development companies have. That infusion gives stakeholders some return as Blue Owl waits for the storm to blow over. A representative of Blue Owl, Craig Packer, head of credit and the CEO of Blue Owl's Business Development Companies, came on "Squawk on The Street" on Friday to talk about his novel infusion. He told an upbeat story about this new method of capital return. Still, the one thing we do know is that the assets in the fund have gone down in value, and you aren't being made whole any time soon. These kinds of development companies can and usually do borrow money to boost returns. Individual investors have historically been drawn to these business development companies for their high-income streams that come from that leverage and from higher interest that the shadow banking companies can charge. They grew in number and size when the Federal Reserve took rates to very low levels during Covid. These investors feel comforted by the fact that there are many different kinds of loans being made to many different kinds of companies â not just one sector typically â and the diversification can create a cushion that protects them from specific defaults. These investors also feel comfortable because a lot of the loans being made by the business development companies are high up in the pecking order of the capital structure. If something goes awry and a portfolio company has to reorganize, these shareholders are thought to be better protected because Blue Owl will be able to salvage something, perhaps something substantial from these senior loans. Make sense? If you are lending an entity money, and the entity can't pay you back, you can seize that entity and if there is any value left, the more senior lender gets that value. For some of us, though, it is all very reminiscent of the mortgage bond strategies that triggered the Great Recession. Remember when outfits back then bundled lots of mortgages, said they were safe, borrowed against them, and then blew up trillions of dollars with them when the houses behind them went down in value, and there was rampant fraud in the system? Of course, the Fed was taking rates higher leading up to that debacle. Now, they are going down. But that doesn't mean we aren't wary of anyone who tells us not to worry, we will all be fine, because of diversification and senior status protection and bond pecking orders. Stepping back for a moment, it's hard to tell why the stock of Blue Owl is going down so hard versus the others in its cohort. Is it because sellers are panicked that it has made a ton more bad loans than its colleagues? Is it because the company owns one particular fund that hasn't allowed for traditional redemptions because something is wrong with what the fund owns? Is it because the company is too opaque to understand? Too aggressive? Maybe it has made too many loans to a kind of company that people now mistrust? Maybe all of those reasons? I think it's the latter. It's so difficult to get your arms around this issue because it is entirely possible that the people who have money in these funds should just calm down and be patient and theoretically, everything will work out. They will do well if they just sit, which was supposed to be the plan when they went into these vehicles anyway. That may well be the case. Still, when I see a supposedly safe investment going down big, I know I would want what's left of my money back â and if I could not get it, that is always distressing. Others, however, might say, wait, this fund is money good, let me in. When Blackstone had difficulty with redemptions for a mortgage real estate investment trust not that long ago, a large institution came in and took advantage of the discount to make a lot of money. Maybe that's the case now. In fact, another manager, Boaz Weinstein, who runs Saba Capital Management, and Cox Capital Partners are preparing a tender offer for the business development corporation fund in question as well as two publicly traded Blue Owl funds. But don't get too excited, they plan to tender at prices between 65% and 80% of net asset value. This development, which occurred Friday evening, adds an interesting twist because we don't know how much of a haircut that will be â or even, if the offer is illusory. It bears watching. The immediate question, however, is how different are the other funds at other firms from those of Blue Owl? Or is Blue Owl just an outlier. There are as many as hundreds of billions of dollars in loans that look like those in the Blue Owl business development companies at the other firms. So, it's easy for people, many of them smart, to shout fire in a crowded theatre or use the hackneyed "canary in a coalmine" jeremiad. We have heard that last phrase over and over. The problem for me is that this kind of warning can, in itself, seed panic. Plus, it often comes from people who are ignorant of the real risks, but know there is no real stigma to getting the risks wrong. Overstating them. Why not just yell fire? It means nothing to them. It could make them look like heroes if things go bad. Or, such shouting could come from people who can benefit from the decline because they are short the securities that are genuinely impacted by the negative chatter. There are short sellers of these funds everywhere. A decline and fall of Blue Owl will hurt many but make a select few fortunes as we saw at the time of the mortgage crisis and denouement. I hesitate to even speculate that could be the case, but I doubt that others will be so prudent and I expect some to throw acetylene on the situation in short order. You know I am not averse to screaming, "They know nothing," if I have to, even if that 2007 declaration endeared me to no one at the time, least of all the Fed. I am not yelling that now. The difficulty I have is that it is entirely possible that things are going very wrong here. So, we have to explore that possibility. You need to do a bit of spelunking to come up with more than a superficial judgment of Blue Owl's woes, especially because they seem to deny that they even have any. This is a murky world where you can't access the information you would like to make better judgments. I spent many hours this week trying to find out everything I could about Blue Owl's portfolios. It's very difficult, and I felt stymied pretty much everywhere I turned. That doesn't inspire confidence â and, heaven knows, you need confidence to own any kind of stock, let alone these kinds of "financials." Making it a little more difficult for me is my bias going in. I have never, ever recommended one of these business development companies on "Mad Money," even as I am constantly asked about them because of their high yields. I would never own one for my Charitable Trust, the portfolio used by the CNBC Investing Club, because as I always say when asked about them, without knowing what's inside them â the actual loans â they are too risky for me. Who really knows what is stuck in there? I always talk about how I never reach for yield, meaning I never take on big risk to get a good yield because too often I have seen that the so-called rewarding yield is wiped out by the capital loss. In other words, the stock I buy with a much bigger yield than others, got that yield because it went down more than most stocks. If I reach for that big yield, that yield might grow ever bigger because the stock keeps going down. Better to not own it in the first place. Now, weeds exist to scare, so I am going to stay out of them. Again, though, before I go into what I can find about the fund holdings, I want you to understand that any time there is blood on the Street, so to speak, and we have it in buckets right now in this group, there are some very smart people who want you to lose money by making you more frightened than you should be. If you are really scared, you will aid them in what they want, which is first, for these securities I am talking about to go down in value â and second, for the companies themselves to fall apart. Historically, we have been worried about these companies when the economy is weak. Companies with a ton of debt obviously do worse than companies with pristine balance sheets when times get tough. Right now the economy is doing fine, not great, not terrible, as we know from the endless chatter about the Fed's next moves. The economy isn't the issue for their portfolios this time. Not yet, anyway. The issue is, like so many other investment themes, the power of artificial intelligence. AI vs. software Specifically, some private equity companies have chosen to invest in lots of software companies, especially enterprise software companies, because they have been some of the best performing stocks of all time. They tend â or had tended, as it were â to work well in good or bad economies. Regarded as rocks of Gibraltar that actually grow, these companies included Microsoft , Salesforce, Oracle , SAP, ServiceNow, Workday, and so many other winning investments. For most of my adult life, since the bounty that is the return of Microsoft, this is where the smart money tends to gravitate to. Silicon Valley isn't much about semiconductor investing. It's about software, mostly for business. It's about software that makes your business stronger and less expensive, something that helps you sell more products, analyze how you sold those products, and position your company to do so as leanly as possible by outsourcing whole functions to these companies. They have been huge winners, but they aren't winning now for a host of reasons. As arduous as it is, we have to wade in to find out the real source not only of Blue Owl's issues but of the other three, the much larger private equity firms, too. Blue Owl's has participated in the lending spree that's taken many software companies private in the last few years. It has not been the principal new owner of these companies. Two companies you haven't heard much of because they are private, Thoma Bravo and Vista Equity Partners, are the chief progenitors and owners of the software companies that have been bought out. We have no idea how they are doing but we know they have been very vocal of their successes. Oddly, I know of no one who disputes that success, which makes it all the more confusing that we are worried about Blue Owl or Blackstone or KKR or Apollo. If the main buyers are solvent, why are we worried about the debt attached to their acquisitions? No matter, we presume that Blue Owl is having problems because it halted redemptions, something it disputes the characterization of but most others would not do so. A fund that is supposed to have regular redemptions that suspends those redemptions is a major red flag. It makes us wonder whether Blue Owl hasn't been as smart a lender as others. Maybe it's been more reckless. Maybe it's taken down more debt or too much debt. Or maybe it's much ado about nothing, which is what I thought Packer was implying when he talked about the novel plan to reward patient investors with capital distributions made by selling good loans that belong to the Blue Owl's business development companies. Again, we don't know the loans. We don't know what's left after these loans are sold. I could argue we know next to nothing. As long as the loans are not in default, maybe we should say the whole thing is one big mistake. But we can't do that. We can't do that because of artificial intelligence and how it is disrupting the very tech holdings that Blue Owl and others have. We know that in the last year many businesses have been disrupted by the wonders of AI. We haven't been able to see how big the disruptions have been. But we know that every single software company, from the ones that provide software as a service (SaaS) to ones that protect companies from cyberterrorism, have lost value to the AI companies. Most recently Anthropic, which is a business-to-business (B2B) company, has become the great destroyer of all incumbents because pretty much everything it does is regarded as equal to or better than any of the companies its offerings compete against, and it does them at a fraction of the cost. We don't really know how good their offerings are, but they are good enough to cause a pause in the buying of the traditional product from the traditional companies that we have loved and respected for many years. And, of course, it's caused an apocalypse in the public stock market for all software stocks. For example, let's take a close-to-home offering: Salesforce . The price of the Club stock has been obliterated in the last year. The decline is such that the stock, once a true darling, has now underperformed the S & P 500 over the last decade Mind you, that's not because its businesses have done poorly. It has been meeting or beating estimates all the way down. It is because skeptics and fearful owners expect that its greatness can't last because Anthropic, and other companies like Anthropic, are said to be developing superior tools that Salesforce offers but for very little money. When Salesforce reports earnings this week, we are going to hear how impactful Anthropic and others have been to Salesforce's bottom line. It is not as if Salesforce CEO Marc Benioff is oblivious to this threat. Actually, it is quite the opposite. Benioff has developed Agentforce, the most potent sales product out there. Salesforce's virtual agents seem to be everywhere. When you get a helpful machine on the line when you call a company it is most likely a Salesforce agent. That, however, is not the part of the business that people are worried about. They are worried about the other parts, namely those that Salesforce charges companies per seat. This is SaaS, and this is the pain point for shareholders even as Benioff insists they are doing well and are integral to the success of Agentforce. Two worries here â there are a heck of a lot of worries, aren't there? â is, one, that AI is so powerful that you need fewer people to do things like sell. If that's the case then there are fewer people to bill so the revenue has to go lower. Two, AI is extremely good at keeping track of itself and of prosecuting its own data. So, you might not need the help that Salesforce has given you historically when you are trying to figure out how to up your sales game. I worry that the Salesforce stock is in a fix. Even if Salesforce reports a good quarter, there will be a cohort of investors who will avoid it because maybe it will be the next quarter that is impacted, or the one after that, or the one after that, etc. I don't know how to end the skepticism that leads to a shrinking price-to-earnings multiple, and this stock already trades at an incredibly low 14 times fiscal 2027 earnings estimates. That doesn't shout cheap, it screams fear. I don't mean to pick on Salesforce. I could have done the same analysis for former darlings ServiceNow , Workday , and Adobe , among many others. Now, let's go back to Blue Owl for a moment. It owns a huge portfolio of companies across many different industries. They are almost all considered to be doing quite well. But when you get to the tech part of the portfolio many of them look like mini-Salesforces or mini-ServiceNows or companies like Atlassian , another once loved stock that's sharing the same crater. Blue Owl is not alone. Most of the other private equity companies have similar portfolios. Blue Owl owns pieces of the debt of these privately held companies and we know that most of the debt is money good. Hard to find anything that is in arrears. But like the situation with Salesforce, we have to ask: "Is it just a matter of time?" Or are there moats, are there things that are proprietary that can't be beaten by even the best that Anthropic or the others have to offer. Obviously, if you are nervous about what AI is doing to companies it is natural to be nervous about a company that has an agglomeration of those companies. Data center buildout Making matters more fraught for Blue Owl, is still one more extenuating factor: Blue Owl is known to be an aggressive lender to what some think is the most overheated portion of the entire economy, the great data center buildout. That kind of lending seemed like a terrific thing when the big hyperscalers were using their own cash flow to do the building. But now, as of the most recent quarter, they are borrowing well beyond what anyone would have ever expected even a year ago. We are talking about hundreds of billions in borrowed money. How big is the hole blown by the amount of borrowing that has to be done? We don't know. Fortunately, these companies make a ton of money. Unfortunately, their big beautiful balance sheets are going to be stressed. They may not be buying stock, they even may have to issue stock if the return isn't there, and there quickly. What looked like a good group to lend to, the hyperscalers, doesn't look so good anymore. Their credit isn't as strong as it was. That makes Blue Owl itself as a lending company riskier than you thought given that the ultimate borrowers are riskier. This backlash may be occurring even as Blue Owl may just be lending to entities doing the building. What looked to be prudent loans may be not nearly as prudent as thought. So Blue Owl's equity gets pounded not just from AI but from the users of AI who want to expand their AI activities to meet the demand that's out there. Because Blue Owl has made loans to enterprise software companies, and it has made data center loans, it has become ground zero of any potential contagion. Right now, it looks to be Patient 1. Hopefully, it gets better. Dreadful, if it doesn't. Is that fair? Aren't these people all very smart. Yes, but again, whether it be Long Term Capital (wiped out as a result of the 1997 Asian and 1998 Russian financial crises) or Bear Stearns and Lehman Brothers (casualties of the 2008 financial crisis) and the others, we have learned that smart is not enough. Go read Lloyd Blankfein's "Streetwise: Getting to and Through Goldman Sachs" if you want a refresher. The book by the former Goldman Sachs CEO comes out this week and it is fabulous. Now, lest you think I am a doomsayer, I don't know the answers to the questions I raised throughout this column. Only hindsight will tell. If AI is as big as everyone claims, then all of the hyperscalers will need every data center they can get. That portion of Blue Owl's loans will be very strong. But remember, we are talking about loans. They aren't going to trade much higher than par. Ironically though, Blue Owl could lose either way. If the data centers stumble, it will get hurt. But if the data center gambit succeeds, it might be because the incumbent non-AI companies in Blue Owl's tech fund might be shredded by AI. Maybe a prudent manager starts slimming down on these tech companies now, taking the hit, moving on. Maybe it will stop lending to the data center build out and clip those, too. That's what I would do. That's what I did when I was a successful hedge fund manager. So, what happens if they don't change course, and they are showing no signs whatsoever of doing so? The doomsayers would tell you that the whole enterprise software contingent is about to collapse taking all investors, public and private, with it. I think that's plain out false. I do believe that these kinds of software vendors may, historically, have been able to command, say four-year contracts, and now those contracts may be only two years as the clients fear the kind of disruption we keep talking about. If that's the case, you could argue that these software companies aren't worth as much as we thought. Estimates get cut; multiples shrink. That makes sense. We value these companies on the earnings that are generated in what we call the "outyears." The outyears have become much more questionable. Hence, why Microsoft or Salesforce or ServiceNow are now trading at ever-shrinking multiples. I don't predict the kind of mass bankruptcies so many pessimists seem to be talking about or betting on. Or, of course, both. In fact, when I look at the software lending portion of the portfolio of Blue Owl â at least as far as I can tell â it seems to be doing very well. Again, that may not be the case two years from now, but just isn't dire now. Not at all. In fact, to say it is dire seems wrong. It's fraught. But many financial instruments are fraught. Do I want to own a package of loans that are being made to these companies? No, but I am risk averse. To me, the whole idea of owning a bag of loans that I don't understand is unappealing. You could say, however, that it is unappealing then to own the stocks of JPMorgan or Bank of America, though, too. What to do about it Which brings me back to the question I posed at the very beginning: Is this a moment where we will look back and say how did we not buy the stock of Blackstone with a 4% dividend yield? What were we thinking, not jumping in and getting an over 8% yield from Blue Owl Capital? Are these the kinds of opportunities similar to what you got right after so-called Liberation Day, back in April when President Donald Trump put sweeping tariffs on partially the entire world and the market plunged only to come back quickly and higher and higher? Are they going to turn out to be like the disk drive companies and the semiconductor capital equipment companies, the former historically low returners and the latter hurt by Chinese exposure? Could they be companies in transition and are ready to counter anything that the now legendary Anthropic can throw at them? Or must they be avoided at all costs along with ServiceNow, Salesforce, CrowdStrike , and Microsoft, all of which are now feared to be targets of Anthropic and may falter or even be upended by them, at least if you listen to the Anthropic supporters or software naysayers, pessimists and short sellers. Of course, it's not just Anthropic. OpenAI and Alphabet will be coming up with more and more disruptive concepts. After all, as Jensen Huang, CEO of Nvidia , which also reports earnings this week, says, it isn't the fourth industrial revolution for nothing. Oh, and for the record, I think the best of these is Alphabet, and it's the one that I like the most, perhaps, of our entire tech portfolio. Right now, as we prepare for this Friday's Investing Club Monthly Meeting meeting, even as I think we have very little exposure to this whole unfolding debacle, it is worrisome â it is, again, fraught. Should we sell Microsoft stock, once an unthinkable prospect because it is such an amazing company but might be vulnerable to the new AI titans, as demonstrated by how poorly its digital assistant Copilot is selling. Or, does it have something up its sleeve the way Alphabet did to reinvent itself? Is Microsoft the hidden gem? Don't we have to shed Salesforce, if it can't dissuade the naysayers? Or, do we just bet that Agentforce is so good that if Benioff splits the company â he doesn't want to do this, by the way â he would bring out more value than is currently observable. I don't know, and yes, I am conscious about how you are never supposed to say, "I don't know," in our business, but I have a bias toward the truth. What I have been vocal about is that I do not think that Anthropic is going to dent CrowdStrike's business with its new cyber defense initiative. That's because Anthropic is defending the AI agents. CrowdStrike is defending the data. Two different things. The digital agents are producing voluminous data, and they are an easily hacked lot even after Anthropic's valiant, much hyped efforts. Their agent work should produce even more data â and therefore, even more business for CrowdStrike. But you lost about 10% on your investment, if you bought CrowdStrike, and my thesis, at the high on Friday of nearly $432. The stock closed at $388. The bulls say it is all time frame. You will be fine if you just don't panic especially with loans that are just a few years away from being due. The bears always say it is 2007 all over again if it is not 2000 and the dotcom explosion. The pain will start with the need to refinance whole swaths of the portfolios and then will gravitate to the collapse of the entire tech edifice. Bottom line As always, I want to avoid a sweeping declaration. I don't know if Blue Owl is fine or not. I know enough to not say that. But I do know this: You now understand, at least to the best of my ability, the state of play of what brought us to Friday. With that you can make the best judgment possible about what we own and which stocks you want to avoid because they may be involved in this morass that can only â negatively or positively â be determined by time. I will refer to this piece many times in the coming months. I am sorry I went so long. I wish I had gone longer in 2007. Always better to be through than to be sorry. (Jim Cramer's Charitable Trust is long GOOGL, NVDA, CRM, MSFT, CRWD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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Is private equity the next market crisis? How we got here and what's next

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