Why Private-Equity Deals Keep Going

This column was originally published on RealMoney on May 29 at 8:18 a.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

More than $81 billion in buyouts this month. That's extraordinary. All kinds of industries: service, manufacturing, credit-card processing.

And what do we hear from the media? "It can't continue." Funny, this "can't continue" story appeared in abundance last November when we had a similar surge. It has appeared many times since the year began.

Yet the story keeps getting written and nobody apologizes for scaring you into selling stocks that were later privatized.

Funny; it will end. But not before many things happen, including these five:

1. Interest rates on the long end going to at least 6%-7%. At that point, I believe it will get too risky.

2. The equity market being closed to the IPOs of the companies that need to be flipped. It's wide open right now.

3. Not one, not two, but maybe three or four, or even five deals going bust. Can't we wait for even one to go belly-up before we get too nervous?

4. Valuations ramping up more. With the S&P 500 selling for about 17.5 times next year's earnings, there is plenty of room to keep buying.

5. Private equity funds running out of money. Very unlikely.

Until we get this litany made real, you should simply dismiss all of the stories you read about the private equity guys pulling back or getting worried.

Without these five events playing out, frankly, I believe most of these cautionary stories are irresponsible, although no one in the media ever has to answer for the sin of keeping people out of a market that goes higher.

Random musings: Hats off to CNBC's Erin Burnett for highlighting the Archstone(ASN Quote) deal . I was skeptical at first but the company has so much New York apartment rental real estate that I should have been pointing it out myself. ... If you love following stocks as much as I do and want to help me help people make money, you're someone I need. I'm looking for an experienced research assistant based in the New York metro area to help me out. (CFAs welcome.) Please send your resum and cover letter to [e-mail], with "research assistant" in the subject line.