Dear Investment Team,

Hello Team, I am writing to discuss an issue I have uncovered in the GDP of America. It's private equity (PE). Private Equity is currently accounting for 16% of Americas GDP and I know that most PE is leveraged debt. I also know that there was a credit crunch in 2022/2023, and a few banks went under. For the most part the PE industry was reletivelty unscathed. But I know that a lot of PE is leveraged 1.5 to 2 times equity which means that losses on 1/2 of a portfolio could equal the value of the entire portfolio. If a systematic crash were to happen again in the PE markets and a 35% loss in PE was realized that would equal a 5% drop in GDP pushing up the debt to GDP by an equal amount. This would devalue the dollar tremendously and inflation would soar. A massive stagflation event would occure. Without the ability to Quantitatively Ease the economy the interest rates would have to go up to manage inflation (or America depends on american savings and allows the prices to soar in an attempt to reduce debt). In either case financing will be difficult to come by and companies with a low debt profile will prevail. I think I want a low debt portfolio something similar to the debt profile of Berkshire Hathaway (<20% debt/equity). I know technology is debt heavy and I may still be in Apple, but moving to financials might be wise so long as they have minimal exposure to PE (maybe something in insurance - I like the Progressive commercials).

Sincerely,

King Arthur Henry George of Britain

April 22, 2026

A few thigs I noticed about Progressive...
Debt to equity is 26% - acceptable
Enterprise Value to EBITDA around 8.5 (give or take) - very good (5 is best)
Free Cash Flow after expenses (buybacks, Capex & dividends) is 8.2 billion based on net income - absolutely excellent
They have consistently increased earnings over the last 5 years from 2 dollars to 19 - outstanding
Progressive is in a tare and currently trading at close to a 52 week low. Their PE is 10 and they are offering a 6.8% dividend (which they can afford). If a crunch occurs 5 years from now we will have collected 33% in dividends - we reinvest them and come out ahead!


Red Flag on Progressive - Their quarterly earnings statements are sparse (Their 8K doesn't mention a dividend)