The Demise of PE: Advertising

by Mr Juggles

Some investors consider sales and marketing expense to be a real investment. If a company is building its brand, it’s building its barriers to entry. Now we know why the private equity funds are doing so poorly. Cerberus and Sears (NASDAQ: SHLD) (now Eddie Lampert’s investment vehicle) have been decreasing their advertising spend…their barriers to entry must have come down shortly thereafter. Looking at the top advertiser through, PSAs, I am confident that Government and wish-washy non-profit organizations will continue to grow…their moats are getting larger.

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