Today’s idea is just a quick consideration of what I wrote last Friday about alternative investments in light of an announcement by private equity firm Kohlberg Kravis Roberts & Co.(KKR), which gained fame by taking RJ Reynolds private two decades ago, will go public on the New York Stock Exchange. KKR is definitely a Goliath in the industry and they have been listed on the Amsterdam exchange for awhile. However, if you were an investor that was considering buying shares in KKR as an alternative investment play for diversification, wouldn’t you need to also consider the ramifications of it being listed on the NYSE?   What ramifications you ask? How about other alternative investment funds and possibly mutual funds that will be purchasing shares of KKR that will have the ability to dump large blocks of shares at will, or the effect of a downgrade by an analyst. These are the kind of things that end up affecting the stock price downward and in essence, your principal investment. Buying an alternative investment that is publicly listed is kind of like spending a tremendous amount of time insulating a house that doesn’t have a roof.

Copyright: Dominic Mazzone Regent Global Funds 2008