Freaky Friday Potpourri: Flat is the New Up!
Considering the carnage, static net worth and preservation of capital is now considered pretty snazzy.
Does anyone else feel like they're fighting for their life?
You would be hard pressed to find a community that was better prepared for the current environment than we were in the 'Ville.
In 2006, we warned of a "prolonged period of socioeconomic malaise… entirely more depressing than a recession."
In 2007, we offered that sub-prime mortgages were the first domino to fall and the other side of zero-percent financing would manifest through credit card delinquencies, auto loans and other forms of consumer credit deterioration.
Entering this year, we readied for deflation and dislocation as debt and derivatives danced towards their death spiral.
We sat in cash and patiently waited for the process of price discovery to play out through the arbiters of time and price.
We played the bounces but were quick to take trades.
I don't highlight these views as a victory lap. That's not how we roll in the 'Ville, particularly when so many people are feeling the pain.
Rather, it's an attempt at perspective, as we must remember not everyone was prepared for this perfect storm. For many, the point of recognition arrived like a clap of thunder.
Sellers to the left of us, layoffs to the right, here we are stuck in the middle with Boo.
Minyanville Advisory Board member Wenda Harris Millard, a savvy and respected seer in the business community, recently said at a conference "Flat is the new up." She was talking about advertising sales revenue but we can extend her wisdom across the entire business spectrum.
Flat returns in the fund community are widely considered a win.
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