For long, we, Middle Eastern Investors, took a passive investment approach in the stocks and bonds of global companies. More recently, we threw a big chunk of our oil money in ailing US & European financial institutions. Did we invest due to Western political pressure or we thought it made business sense to invest? I do not have enough evidence to figure out the answer.
Consider ADIA’s $7.5 billion investment in Citigroup. When the deal was struck in Nov 07, it was viewed as a bargain when Citi’s shares were trading at $30 per share. I do not know what a bargain is when Citi is currently trading at $3.50 per share (88% down from Nov 07). Other examples are roughly the same, of course in negative.
We had enough of financial institutions. It is time to diversify. Oh, did I mention that the New York Times Co. is up for sale? How come we are NOT interested? With all the bad publicity that we are getting in the American and European press, it makes political sense to buy into media companies. Since we are going to lose 88% of our money anyway, why not at least get some intangible benefits such as good publicity?
However, I will not recommend an investment that does not make business sense. I am sure there are other media companies in dire financial circumstances and are disparate for cash. Find one that makes business and media sense and invest for the long-run (i.e. greater than 10 years).
Imagine buying Fox News Channel, or the CNN? Waw
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