Bear Stearn's a takeover target?

Bear Stearns has been beaten up pretty good this year over its exposure to the subprime implosion and most recently its earnings. But its stock has flagged to the point now that it has a market capitalization in the $17 billion range and trades at just 1.5 times its book value. Breakingviews.com suggests that it might receive some attention as a takeover target. Certainly, Bear Stearns is a powerful Wall Street brand, one that has been upfront about its mortgage woes. You would expect the firm to work through these issues over the next year or so, if not sooner. But at this cheap price, you have to think that a deal is a possibility. That said, who would the suitors be and how would they approach it? Sell off the prime brokerage operation? It's all a bit murky, but you have to think that some bankers have at least thought about it.

Our take on the news: Bear Stearn's is a complete mess, as are numerous other firms. A complete ovehaul and shake-up is needed, as well as company culture.

Tender offer making a comeback?

Tender offers have become rare in recent years. But after some arcane rules were clarified, it seems that such offers are making a comeback of sorts. The AP notes that through May, about 15 percent of friendly deals involved tender offers, up more than three times from a year earlier. Is this a good way of making hedge funds and others shut up about a supposedly "undervalued" price by a bidder? Maybe so. Tender offers usually offer speed. One can buy a firm much more quickly than it could if it went via the shareholder approval route. But the tender also puts pressure on shareholders to tender quickly, to avoid missing out on the offer, and locking in gains. That's preferable to to the long arduous route of holding out. Two recent deals, for Laureate Education and Biomet, seem to indicate that tenders can reduce shareholder opposition to deals.

Our take on this news: Nothing will shut up hedge fund managers.

Goldman works hard to avoid conflict

There has been a lot of hand-wringing over the many conflicts that top investment banks have when acting as advisor and principal. The big guns have worked it all out and are enjoying the fruits of both. But that doesn't mean there will not be speed bumps. Breakingviews.com chronicles how Goldman Sachs had to work hard to deal with some perception issues in the U.K. It took some criticism for its conflicted role, which earned local bankers a "spank form Hank," as in then chairman Hank Paulson. He told them to shape up. Their new proactive approach was evident during the New Look auction. It worked hard to clear up confusion about its role, even going so far as to deny rumors that it was putting up a consortium to make competitive bid. In general, the private equity side seems to be deferring to the advisory side.

Our take on the news: Goldman's is a conflict period!!

Big Bear Stearn's in Big Trouble

Just when it seemed like Wall Street's top firms had weathered the subprime storm comes news that Bear Stearns' High-Grade Structured Credit Strategies Enhanced Leverage Fund sank 23 percent as of the end of April 30. According to BusinessWeek Bear Stearns' asset management group has suspended redemptions which has investors upset (to say the least). One apparently has been trying in vain to get his money back since February. The fund got caught on the losing end of a big bet on subprime mortgages. In a June 7 letter, Bear Stearns explained that redemptions were not possible because the "company will not have sufficient liquid assets to pay investors." Ouch! Some $250 million in assets were attempting to flee. It's Hail Mary time for the fund. It still has about $500 million, so a lucky run might be enough to put all this under the bridge.

Our take on this news: This is the tip of the iceberg for an entire industry. Bears is only one of numerous large institutions that are in trouble with their hedge funds.

Bears misses earnings, Goldman beats revenue

Bear Stearns seemed to confirm that all the worrying was justified. It missed estimates by a decent margin, driven by poor results in fixed income trading and a large writedown. There has been a lot of hand-wringing over whether Bear was having a tougher time weathering the subprime mess, which clearly have hit its bond operations. As for Goldman Sachs, it beat the revenue and earnings estimates yet again, albeit by a smaller margin than we're used to. Investment banking and principal investments remain strong. But the growth has slowed from the near impossible growth rates the firm threw up last year. So the early take may be that the industry remains strong but that there are finally signs that meteoric surge is finally starting to moderate. This has been the conventional wisdom for a while, and now it seems more justified.

Our take on this news: Both firms are in trouble and will plumment in value from a long history of fixing the books.

Is James Cramer slipping?

Boo-yah! What's going on with Jim Cramer's ratings? According to one measure, his ratings fell to an average of 175,000 viewers in May, a nearly 30 percent drop from the 247,000 a year earlier. In March, he fared much better with an average 255,000 viewers. Interestingly, among those aged 25-54, his average viewership has gone from 88,000 in March to 50,000 in May. For the year, he's down 50 percent. I'm not a TV ratings experts, so I am not sure what's at play here. But you have to wonder if his schtick is getting old. His long-ish article in New York Magazine may be interesting for some. Others might just want the tips. I'd like to see some work on whether the "Cramer effect" is as strong as it once was. That might be a more telling indicator of his popularity, if not his relevance.

Our take on this news: Why should anyone be watching someone who was fined heavily for illegal activity, then given a tv show. Plus, he runs off the mouth about manipulating the viewers for his own benefit! Tell us why anyone should watch or care what he says!

Rubin supports taxing the carry from funds

Those that favor taxing the carry of hedge funds and private equity funds as income not capital gains got something of a boost recently: Robert Rubin, former Treasury secretary and chairman of the executive committee at Citigroup, has made a case for the change. At a tax-reform conference, he was asked about the issue. He basically said that it seems like alternative investment funds perform a service. They manage other people's money, and that fees for such services ought to be considered income. He also noted, according to The New York Times, that the issue ought to be thoughtfully considered by lawmakers. As of now, it does not appear that the political capital is sufficient to ram through such a change. But the groundwork perhaps is being laid.

Our take on this news: Could the Democrats be anymore anti-growth than this? We don't think so.

Blackstone exec's take on IPO

The Blackstone group initial public offering is turning out to be a well-covered affair. People are really picking apart its registration material. The latest is that Blackstone executives--this is not a surprise--will reap more than $2.3 billion when offering occurs sometime next week. The much-anticipated disclosure offers a glimpse of current compensation as well. CEO Stephen Schwarzman made nearly $400 million in cash last year. He'll make up to $677 million of the $3.9 billion in proceeds from the deal. Historically, the firm's top executives have not taken a salary or bonus, receiving instead from their ownership stakes. Also last year, senior chairman Peter Peterson made $212.9 million, while COO Hamilton James made nearly $100 million.

Our take on this news: Good for Blackstone, they work hard and have tried to maximize value.

Another stock-picking game in trouble

Cheating on the part of contestants has forced TheStreet.com to cancel the first round of its popular game, Beat the Street, due to possible cheating. The game offered a $100,000 prize. This is the second heavily marketed game that has run into trouble with cheating. Recall that CNBC's contest, which offers a $1 million prize, has also drawn controversy over charges that some contestants effectively traded after hours based on same-day results. CNBC has hired outside investigators to look into the problem. It's unclear exactly what is at issue with TheStreet's game. It's kind of a sad commentary on the willingness of rank and file investors to bend the rules, if that is what happened. Ethical lapses are not limited to the Enrons of the world.

Our take on this news: As if we didn't think the TheStreet.com could pull off anything honest in the first place. Should anyone be surprized about this? Not us!

SORRY! WE HAD TECHNICAL DIFFICULTIES! :(

Sorry about the delay in posting blogs. For some reason we had technical difficulties collecting our information from one another and couldn't fairly post our consensus, so we chose not to post anything until the situation was resolved. We're back and hopefully this won't happen again.

Our take on this news: GOOD! And it better not happen again!

Fewer opportunites for hedge funds

Is the hedge fund industry being overwhelmed with new cash? Well, there's a case to be made that there just aren't enough investment ideas to sustain all this money. So what you end up with are more hedge funds that are all too correlated with main asset class indexes, which defeats the purpose. In a letter to clients, Ray Dalio, of Bridgewater Associates, notes that over the last 2 years, hedge funds were 60 percent correlated with the S&P 500, 67 percent correlated to the Morgan Stanley EAFE, and 87 percent correlated to emerging market stocks, according to the New York Times. Correlations are historically high with commodities and high-yield indexes. Of course, correlations among hedge funds are also high. This is not a huge deal really, until the markets head south. That's when hedge funds are supposed to really shine. We'll see.

Our take on this news: As stated previously in earlier blogs here, as well as our previously posted personal blogs. Who didn't see this day coming with all this new money coming into play? We all seen this the fast approaching. Tick... tock... tick... tock... tick... tock...

Weill backing new investment firm

Is Sandy Weill getting back into the game? Well, that's the scuttlebutt. Turns out that Peter Scaturro, who headed Citigroup's private bank until leaving for U.S. Trust, is leaving his current post at the end of the month. Scaturro has been credited with a turnaround at the firm, which had been hit hard by defections and a lack of synergy with its then-owner Charles Schwab. U.S. Trust was bought by Bank of America recently. Unfortunately, there have been subsequent disagreements leading to his somewhat surprising departure. The New York Post reports Scaturro has held talks with Weill and various private equity firms about launching a wealth management firm. The field is crowded, but it seems he has the name and the supporters to make it happen.

Our take on this news: Good for Sandy Weill. A brilliant investor in his own right now financing a new investment firm. While many corporate raiders and financiers of the past, Asher Edelman, now enjoying art in Paris, Saul Steinberg resting easy and enjoying his grandchildren, the Minneapolis financiers of Irwin Jacobs tending to his boating and fishing tournament empire, Carl Pohlad turning the reins over to his sons and watching his Minnesota Twins play competitive baseball, and Richard Christenson announcing his retirement from the private equity firm he started 30 years ago. It is refreshing to see a Weill come out from retirement and guide this new firm with his long history of success in building value. Hooray and best wishes to Sam Weill.

Prudential to close equity research group

We've discussed before that the business model for research and trading has changed. Once you took investment banking out of the equation, it seemed like a less viable concern, especially in this era of unbundled trades. So it's not really surprising that Prudential Financial, the big insurer, will shut down its equity research and trading business, laying off about 420 staffers around the world. Prudential said it was unable to achieve the appropriate scale and would rather focus on other businesses. Recall that well-known bank analyst Michael Mayo and his team left for Deutsche Bank recently. It seems that research can no longer sustain a sales and trading operation. There are some independent shops that have found niches, however. It's telling that Prudential could not find a buyer; it had been on the block for months.

Our take on this news: The reason Prudential wasn't able to sell its operations was because that new firms are springing up doing that line of work. Why invest hundreds of millions for an operation one can start from scratch for much less. The top-notch research firms are still around and doing quite well.

Putnam settles with SEC

Two former fund managers at Putnam, who were sued by the US market regulator in 2003 over a mutual fund scandal, have settled out of court for a combined $1.5m (€1.1m).

Bloomberg reports Justin Scott agreed to forfeit $1.05m in profits and fines, while former colleague Omid Kamshad agreed to pay $471,000 to settle the claims.

The pair, both managing directors at Putnam in 2003, were sued by the Securities & Exchange Commission and Bill Galvin, secretary of the Commonwealth of Massachusetts, for trading mutual funds illegally.

According to documents filed, they moved money around the various funds in round trades, taking advantage of sophisticated arbitrage opportunities and inside information.

Our take on this news: Why aren't these two individuals in jail? Is doing something illegal criminal anymore? The only way to stop corruption on Wall Street is to jail them for their illegal activities. The fines they can afford, jail time is something they need to have for punishment.

The case led to massive client withdrawals from Putnam, amounting to over $50bn. The company agreed in 2004 to pay $110m to settle related claims that it failed to report the wrongdoing.

Putnam was sold in January to Canadian insurer Power Financial for $3.9bn.

Kamshad and Scott neither admitted nor denied any wrongdoing under the agreement, the newswire said, and as a condition they are barred from working with an investment adviser for one year.

Last July, Kamshad was hired as a researcher by hedge fund group Grosvenor Street Capital. It is unclear what effect the settlement will have on his employment.

Hedge Funds shorting ETF's

There's a whole lot of hedge funds out there trying to short stocks. Add to that a growing number of mutual funds and even individuals as well as a rising market, and you've got a really tough environment in which to short. Just borrowing the shares is tough. That's one reason why hedge fund Keel Capital Management shuttered itself. The lack of short opportunities made it hard to stick to its parameters. So what to do? According to MarketWatch, more funds are experimenting with shorting exchange traded funds. Right now, there are no fewer than eight ETFs with short interest that exceeds the number of shares outstanding. My guess is that it will be hard to short ETFs pretty soon.

Our take on this news: This is a sheer sign of the desperation of the hedge fund industry. Their heydays are numbers by both the growing global economy and soon-to-be stricter regulations.

The powerhouse of Goldman Sachs

Goldman Sachs has worked on nearly half of all private equity deals around the world so far in 2007, in what is turning out to be a record year for the industry.

The combined value of buyouts in the first five months of this year has climbed to nearly $500bn (€372bn), according to data provider Dealogic, and Goldman has worked as an adviser or finance arranger on 50 deals worth a combined $226.5bn.

Goldman pushed JP Morgan and Citi into second and third place respectively, but was boosted by the firm advising its in-house private equity arm’s $87.7bn of deals. Based on an assumed 1% to 2% advisory and debt arrangement fee, Goldman Sachs could have earned $4bn in the first five months, if all announced deals are completed.

By the end of May, private equity firms had announced $483bn of deals, more than double the total by the same stage of 2006 and nearly 30 times the value a decade before.

A third of the year’s deals were announced last month, Dealogic said, including Goldman Sachs and TPG Capital’s agreed $25bn take-private of US telecoms company Alltel. However, Kohlberg Kravis Roberts has taken the top spot for financial sponsors having agreed $123bn of deals.

KKR’s global buyout total was nearly the same size as the entire value of announced deals in Europe, according to Dealogic, which was $734bn.

Our take on this news: Goldman Sachs is indeed a powerful and formiable investment firm. However, KKR is still and always will be the King of Wall Street. KKR is superior to everyone in every aspect of mergers and acquisitions industry.

Where Venture Capital is flocking to now

What's the hottest place to invest? That's always what any self-respecting venture capitalist wants to know. In 2004, Russian tech startups were clearly off the radar screen, as Sven Lingjaerde will tell you. Lingjaerde, a VC and founder of the European Tech Tour Assn., organized a visit to Moscow for 53 venture capitalists from the U.S. and Western Europe. At the time, none of the 25 outfits that pitched to the group got funding.

Fast-forward three years, and it's a different story. Today, eight of those companies have secured Western backing. And by some estimates, three could be valued north of $1 billion.
Finally, investors are starting to look beyond China and India and are pouring more time, energy, and money into the fast-growing economies of Central and Eastern Europe. At least $500 million is sitting in funds targeting the region, and far more is coming from global outfits that see potential in the former Soviet bloc. With a deep pool of creative technology talent and a gross domestic product expanding at a rate of 6% to 9% per year, Eastern Europe is piquing the interest of VCs large and small. Says Yoav Sarnet, who oversees business development in the region for Cisco System (CSCO)s Inc.: "As we look globally to where the next venture asset class is going to emerge, it's definitely Russia and Central and Eastern Europe."

Some VCs even say the region could soon rival India and China when it comes to spawning tech startups with global potential. While India has built a global hub for information technology outsourcing, little of the business is core research and development for cutting-edge products. Russians, Poles, and Romanians, by contrast, excel at the kind of creative development work tech startups need for breakthrough innovations, many investors say. "Central and Eastern Europe are already a better play" than China and India, says Scott Maxwell, co-founder of OpenView, which has invested 30% of a $100 million global technology fund in the region. "The technologies are more sophisticated."

Venture investors say the region is a bargain, with the potential for finding blockbuster hits by exporting these startups' wares and knowhow to customers worldwide. Some think valuations of tech companies are as little as 10% of comparable outfits in the U.S. "You can make very small investments with mega-returns if the technology works out," says Richard Stokvis, a partner at London investment bank Europa Ventures and a medical technology expert who advises venture backers in the region.

PROS AND CONSFor the moment, Russia is getting lots of buzz, thanks in no small part to its huge and increasingly flush consumer class. Investors like the country's vibrant domestic market for Web and mobile phone services. And the potential profits in serving Russia's 150 million consumers is clear, thanks to successes such as Yandex and Ozon, Russia's answers to Google (GOOG) and Amazon.com (AMZN).
That has investors jumping in with both feet. Asset Management Co. in Palo Alto, Calif., run by legendary VC Franklin "Pitch" Johnson, has launched a $104 million fund called Bioprocess Capital Partners. It will invest in Russian biotech and includes $52 million from the Kremlin. Veteran tech executive Roel Pieper, based in the Netherlands, has set up a new fund primarily targeting Russian companies, including hydrogen technologies and light jets. And Alexander Galitsky, a Russian entrepreneur turned investor, is planning a fund later this year in partnership with unnamed Western VCs. "This is just the beginning," says Joe Bowman, an American working for Russian Technologies, a $50 million early-stage fund based in Moscow. "We're entering a new era for Russian venture capital."

Diving into Russia, though, still carries plenty of risk, and for some the country remains strictly off-limits.

With its rampant corruption, shifting legal environment, and competition from deep-pocketed locals, Russia can be a tough place for Western VCs. "One reason not to go to Russia is the amount of Russian money available," says Pekka Santeri Mäki, managing director of 3TS Capital Partners Ltd., which shuns Russia for Central Europe and is closing deals with two tech startups in Romania.

Indeed, Central Europe has no shortage of brilliant minds and promising technologies waiting to be set loose. New York VC Martin Jasinski visited 50 companies in Poland last year and was impressed with startup Medicalgorithmics, which recently received European approval to market a portable electrocardiogram monitor that sends data wirelessly to a patient's doctor. Medicalgorithmics is the first investment of New Europe Ventures, a $50 million fund aimed at Eastern Europe.

While there's plenty of tech talent in the region, its companies are often less endowed with management chops. So some investors are providing financial and marketing smarts. U.S. and European backers of LogMeIn, a maker of popular software for remote access to PCs, urged the company to move its marketing headquarters to Boston, which helped put sales on track to double this year, to $40 million. And Acronis, a Russian software house that makes disaster recovery programs, left its research-and-development team of 150 outside Moscow but moved its headquarters to Burlington, Mass., and hired an American CEO to pump up global sales.
One pleasant surprise for VCs is the red-hot Warsaw Stock Exchange. Last year, 38 companies raised a total of $1.9 billion in initial public offerings in Warsaw—second in Europe behind the London Stock Exchange. That helped fuel a 42% rise in Warsaw's benchmark index in 2006. Since January, 19 more companies have gone public in the Polish capital, helping to push the exchange up by an additional 18% so far this year. In October the bourse will launch a secondary market tailored to listings for technology startups as it seeks to extend its allure as a regional exchange.

The winners on the Warsaw bourse could soon be joined by a handful of Russian startups that are eyeing public offerings. One is Yandex, a 10-year-old Web search company based in Moscow that has a 50% market share in Russia, vs. Google's 15%. Yandex' revenues doubled last year, to $72 million, and a planned IPO could give the company a market capitalization of some $1 billion.

Our take on this news: The sauviest venture capitalists have always looked throughtout the world for opportunities. With an ever-changing economical climate in many countries, opportunites abound everywhere. Just make sure your invesatments aren't in politically troubled countries.

Morgan Stanley spinning off Discover

NEW YORK (AP) -- Morgan Stanley on Friday said it will spin off its Discover Financial Services unit on June 30 to focus on its more lucrative securities business.
The New York-based company had said in December that it would spin off the credit-card unit, without disclosing details. On Friday, it said shareholders will get one share of Discover common stock for every two shares of Morgan Stanley. It expects regular trading to begin July 2 on the New York Stock Exchange under the stock symbol "DFS."

This marks the end of Morgan Stanley's involvement with Discover, which began as a unit of Sears Roebuck & Co. in 1986 and eventually grew into the world's fourth-biggest credit-card brand. Discover has about $5.2 billion in equity, with some $46.3 billion of outstanding loans.
While Discover has been an important slice of Morgan Stanley's revenue stream, there has been continued calls by Wall Street for the company to focus on its more lucrative investment banking and institutional trading business. The nation's second-largest investment house has in the past trailed the kind of profit margins regularly achieved by bigger rival Goldman Sachs Group Inc.

The spin-off is structured as a tax-free dividend. Morgan Stanley is not keeping any shares.

The move comes as rival Visa International plans to go public in 2007, following in the footsteps of Mastercard Inc.'s banner listing earlier this year.

Discover touts more than 50 million card holders, but only 18.4 million active accounts. The unit earned $1.5 billion in 2006 on record revenue of $4.3 billion.

Shares of Morgan Stanley rose $1.03, or 1.2 percent, to $86.07 Friday

Our take on this news: It is about time Morgan Stanley figured this one out! The Discover spin-ff will be a win-win for both companies.

Bancroft's changing their mind?

No one really thought the Bancrofts were united in their decision to spurn Rupert Murdoch. Indeed, the offer, generous on the surface, came at a time of generational transition within the family. While the elders opposed a deal, their children were more willing to think about it. Some, according to the New York Times, thought that the company needed some strong medicine to cure years of poor performance. Still, it took family member Leslie Hill to push the family to take action. The result is that the family changed its tune and is now willing to speak with News Corporation. I'm not sure what this will amount too. Many are betting on another bidder emerging. Stay tuned.

Our take on this news: Did anyone really doubt that the offer by Murdoch would be spurned? Not any of us!

Sizing up Solar IPO's

Two profitable Chinese outfits are going public, but sunstruck investors should remember last year's disappointing ethanol offerings

by Alex Halperin

Around this time last year, corn-based ethanol sprouted into investor's minds. Stock in agriculture giant Archer Daniels Midland (ADM) was soaring on ethanol prices, and smaller pure-play outfits like VeraSun Energy (VSE) and Aventine Renewable Energy (AVR) timed their initial public offerings to coincide with America's newfound interest in alternative fuel.
It hasn't worked out as planned. In Washington, representatives of corn-growing states have put massive support behind the fuel, ensuring that its use will increase for years to come, but the ethanol industry hasn't been able to avoid criticism that the fuel is more of a sop to farmers than the solution to U.S. energy problems. Even ethanol producers have suffered, as demand for the fuel has sent corn prices skyrocketing. Since their market debuts, VeraSun and Aventine shares have both fallen more than 40%, and ADM is well off its 52-week high.
That hasn't kept other alt-energy players from throwing their hats in the ring. This year, investors willing to brave this still risky segment may have a more attractive option in solar power. Two upcoming U.S. initial public offerings by Chinese companies highlight a clean energy source that could be a smarter long-term bet. While corn-derived ethanol's strongest advocates are corn farmers and their lobbyists, energy analysts tend to see a bright future for solar power once it can overcome several obstacles.
Seeking Secure Supplies
The first hurdle, not surprisingly, is cost. Solar installations are expensive and polysilicon, a necessary ingredient for solar panels and computer chips, is in short supply. Demand exceeds the capacity and new plants can take years to come on line. Polysilicon is so highly valued that U.S. outfit Evergreen Solar (ESLR) and the Chinese company Suntech Power (STP) recently exchanged stakes in themselves for secure supplies of the material.
This week should see the IPO of LDK Solar, a Chinese manufacturer of solar wafers used in the solar panels that actually convert sunlight into electricity. The company, analysts say, is in a relatively good position, having secured much of the polysilicon it will need for its expected production capacity. Sam Snyder, an analyst at IPO research shop Renaissance Capital, says the deal for the pure-play wafer manufacturer has "scarcity value" in an industry where companies split up the multistep process of manufacturing solar panels.
Another Chinese player expected to price in coming weeks is Yingli Green Energy, which offers investors a vertically integrated model that manufactures wafers and makes them into photovoltaic cells. It also works on folding them into workable solar power-generating systems.
Relatively Young Industry
Both companies have put up credible numbers. LDK posted 2006 net income of $25.8 million on sales of $105.5 million, while Yingli had $24.1 million in net income on revenue of $114.4 million in the first eight months of 2006.
So far the relatively young industry has seen excitement as stocks in profitable companies like SunPower (SPWR) and First Solar (FSLR) enjoyed enormous gains in their stock prices while other less nimble companies struggled in the fledgling space. The Chinese companies may have advantages over their U.S. counterparts as demand for solar electricity builds.
Todd Glass, chair of the energy practice group at law firm Heller Ehrman, says "anytime where manufacturing cost is a key component, China has a competitive edge" over American outfits. This is especially the case when the companies have a relatively solid supply of polysilicon, as both LDK and Yingli do.
New Technology on the Way
However industry dynamics could be changing. Glass sees the polysilicon supply growing as more plants get up and running. Already industry consensus has it that more polysilicon is used in solar panels than for microchips, their previous dominant use.
Polysilicon has proven a boost for manufacturers such as St. Peters (Mo.)-based MEMC Electronic Materials (WFR) which has seen its stock price more than double since July. However a newer technology called thin film could emerge as the next-generation solar competitor. Miasolé, a private Silicon Valley startup, manufactures solar cells that use a metallic compound instead of polysilicon, exempting it from the heated competition for polysilicon. Profitable First Solar also uses a non-silicon technology.
But before warming to solar power, investors should remember how last year's ethanol boomlet went sour. Even when a product gains widespread use, profits—and stock-price gains—are not a sure thing. And while solar technology has a bright future, not all the players will share the spoils.

Our take on this news: This is a great idea to give alternative energy firms access to the marketplace. This industry's need alot of capital which Wall Street can provide. This, too, is an old concept never taken advantage of a decade ago. Better later, than never.

Evercore aims to make bigger splash

Boutique investment bank Evercore Partners really wants to make a splash in the deal world. Evercore's co-chairman and co-CEO Roger Altman says the bank aims to hire about 10 more senior bankers this year, bankers of the big-name variety. That's a lot for a firm that has just 16 such "producing partners" on its roster currently. The latest hire was a big one: Mark Vander Ploeg, a veteran of Merrill Lynch, where he was vice chairman and co-head of consumer, retail, gaming, leisure and transportation. There are rumors that Evercore is pursuing George Young, a star telecom banker who left Lehman Brothers earlier this year. I'm sure the firm is handing out lots of equity. The bank is also betting there's a lot of legs left in the current deal rally. We'll likely see more big announcements.

Our take on this news: Evercore is one of the few companies that have the right idea. Find proven "producing partners" who have the ability to distinguish itself from trying to be something there not. Giving out equity of the firm is the right incentive to qualified and competent personal.

Value hedge fund, and interesting concept

We do not often associate value investing with hedge funds. We tend to think of hedge funds as swashbuckling growth style investing goosed with lots of derivative play. But Sellers Capital, formed by a former Morningstar strategist, is indeed a value-oriented hedge fund. What's more, it's concentrated. No more than 15 stocks in its portfolio at a time. Returns are returns after all, so if the fund can make it work, people will notice. Before fees, the fund has generated annualized returns of 33.1 percent vs. 13.4 percent for the S&P 500. After fees, investors have still probably beat the index. Still, I doubt we'll see a lot of similar funds rise. Factoring out all the fees, it just may be that people will be tempted over the long-term to ask: Why not a mutual fund?

Our take on this news: Great question, "Why not a mutual fund?" Stay clear of the Hedge Fund industry, whenever everyone joins in the process, it is set up for a downside and failure.