Understanding Blue Owl's Crash

Kirk SpanoInvesting Group LeaderFollow5ShareSavePlay(20min)Comments(8)SummaryBlue Owl faces significant risks, with its asset-light, fee-based model under stress as "permanent capital" durability is questioned.I see the market's discount as a rational reassessment of OWL's underlying asset values, deal underwriting, and future fee collectability.Dividend sustainability is in doubt. Management admits the payout ratio is too high, and I expect a substantial cut, not a minor one.I'm avoiding OWL until a true washout occurs, as risk/reward is unknown and the downside may not be fully priced in yet.I have placed Blue Owl in Charlie Munger's "too hard" file and might come back to it later.This idea was discussed in more depth with members of my private investing community, Margin of Safety Investing. Learn More » Василий Авраменко/iStock via Getty Images The three most important words in investing are "margin of safety." - Warren Buffett PropNotes recently released the Editor's Pick bullish thesis on Blue Owl (OWL): Blue Owl: 3 Bear Myths That Don't Hold Up. I strongly encourage you toThis article was written byKirk Spano28.16K FollowersFollowKirk Spano's Margin of Safety Investing helps you make more profits and income with less risk. This institutional level service features Kirk's stock and ETF focus lists, trade alerts, option selling for income, top curated investment analysis, an active chat and his award winning macro analysis.

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