In Memory of Bennet Sedacca
True loss won't be defined by a bottom line.
2009, for all the twists and turns and market burns, will forever be remembered as a year we lost something more important than money.
On March 10, as the tape was about to embark on one of the most vicious bear market rallies in history, Bennet Sedacca posted one of his final missives on our Buzz & Banter:
My firm is now 100% invested to our bogey in long only accounts via IVW, IWW, EWJ and XLF. The Daily Custom crowd sentiment poll I use just hit a record low. Add to this valuations, better news for banks and falling gold, and I have to be in.
For what it's worth, this is our second time in 12 months being long. The last was mid-November. Who the heck knows if we're right, but better to buy at 600, than 1600. The market just feels sold out to me.
That was quite a shift for "Blue Steel;" Minyans will remember Bennet as one of the more bearish professors in our bunch for some time. He earned quite the name for himself in May 2008 when he offered that Wall Street was technically insolvent as he asked the question, "Who Has More Level 3 Assets Than Capital?"
His laundry list of troubled firms was a "who's who" of banking, including storied franchises such as Bear Stearns (JPM), Morgan Stanley (MS), Merrill Lynch (BAC), Goldman Sachs (GS), Lehman, Fannie Mae (FNM), Citigroup (C), Prudential (PRU), and Hartford (HIG).
While our negative stance on the financial complex was well established, there was palpable push back as we embraced the far-fetched thesis that the coming storm wasn't only bad for the banks -- it could suck the entire capital market construct into a vortex of despair.
We were questioned by some and mocked by others but held true to our view. Through it all, Bennet was steadfast in his steady stream of consciousness that something horrible was about to happen. He wasn't just a grizzly bear; he had a knack for engaging our audience and breaking down complex topics into easily digestible bite-size pieces.
When he penned Dead Banks Walking in August 2008, offering that among others, Washington Mutual (WFC), National City (KEY), and General Motors/GMAC wouldn't make it to the other side of the financial crisis, tangible drama emerged.
Washington Mutual was an advertiser on Minyanville and as luck would have it; their banner ad appeared next to his written obituary. They asked us to take down the column but we told them we would not; our editorial mandate was "truth and trust" and people needed to understand our perceived risks regardless of who was paying our bills.
They pulled their campaign, a fact I never communicated to Bennet; the following month, the United States Office of Thrift Supervision seized WaMu and placed it into the receivership of the FDIC.
Alas, his insight and acumen isn't what I'll miss most. As I wrote in my Tribute to Bennet Sedacca-if you haven't read that column or the comments that followed, I'll kindly ask you to soak it in-he was a rare breed and at times, an odd bird. It's those idiosyncrasies I miss most; the out-of-the blue non-sequiturs, the inappropriate instant messages, sudden mood shifts that always kept us on our toes, the heart of gold that beat strongly under his gruff persona.
A few weeks ago, at The 2009 Minyanville Festivus to Benefit Children's Education, Nan and the clan joined us we officially launched The Bennet Sedacca Memorial Scholarship at Rutgers University. There were tears of remembrance as we announced the pledge but soon thereafter, we collectively "hugged a Sedacca." The sadness shifted to smiles, darkness opened to light and our community embraced the family and assured them, once again, that they will never, ever be alone.
Someone once told me that the greatest tribute you can pay someone is to live your life in a manner consistent with what he or she would have wanted. As Nancy and Katie stepped on stage and sang like stars, I couldn't help look to the sky and smile. Bennet was there, proudly watching his beloved family, and he remains with us to this day.
For that, and I speak for the masses that benefitted from his incredible insights and acumen, we're better people for having known him.
Rest in peace, my brother, and to the entire Sedacca family, please know we'll hold you in our hearts this holiday season and beyond.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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