Blackstone’s Jon Gray: Stay Calm, Stay Positive, Never Give Up

Summary

Jon Gray, President and COO of Blackstone, discusses two out-of-consensus investment calls with Morgan Stanley Co-President Dan Simkowitz: the Hilton LBO, which survived the financial crisis and became highly profitable, and a dotcom-era San Jose office loss. Gray emphasizes staying calm, investing in the right 'neighborhoods' with strong tailwinds, quality businesses, and good management, while avoiding excessive leverage. He also outlines Blackstone's current high-conviction areas—digital and energy infrastructure, India, and life sciences—and contrasts Nvidia's valuation with Cisco's dotcom-era multiple.

• Jon Gray recounts Blackstone's Hilton investment and its turbulent path through the financial crisis.
• The Hilton deal lost 71% before recovering and generating $14B, highlighting leverage risk.
• Gray's dotcom-era San Jose office loss illustrates overpaying in a speculative mania.
• He stresses right neighborhoods, tailwinds, business quality, management, and staying calm.
• Current high-conviction areas cited: digital infrastructure, energy infrastructure, India, and life sciences.
• Gray says Nvidia's sub-30x earnings multiple is far below Cisco's dotcom-era 130x.
• He notes widespread bubble concern in private credit, AI, and stocks as a helpful caution.