Bennet Sedacca: Welcome to the Jungle
Last December, I wrote a piece, entitled “I Don’t Know”, detailing what I expected for the financial markets in 2008. I usually have a fairly strong opinion, but last December I really didn’t know what to say about the future. My reasoning remains that to use historical precedent as a roadmap for these currently unprecedented times is a big mistake. I have a keen appreciation for history, however because the build-up of debt has been so unique, using only history as a guideline is a mistake.
Instead, I firmly believe that what follows an unprecedented buildup of debt plus the creation of esoteric financial instruments and poor lending habits would lead to an unwind of historical proportions.
I believe that when historians and investors look back on the unwinding of the most dangerous financial experiment of all time, this will be considered a historical guide for the future.
Welcome to the financial jungle, a place where we have a vague idea of what can happen given historical precedent, but must wait for the unwinding or leverage and risk to end. The unwinding is unpleasant to watch even for those of us that have been expecting an unruly market. It seems that we have now entered a period where survival is key and the goal is just to exit this painful period with the majority of our capital intact. It is at that point that we can pounce as a predator would in a jungle and emerge the victor.
I feel for those that have lost capital while reaching for opportunity, but I continue to believe and position client assets with the mantra of, “I would rather lose opportunity than capital.” Despite the fact that tens of trillions of dollars of financial assets have evaporated this year, I continue to search for when it will be time to enter the jungle and attempt to emerge the victor. I do have some ideas, or educated guesses, on what could happen, but that is all we have to rely on with markets that are so violently volatile.
Welcome to the Jungle.
Click here for Bennet’s full report.
* President of Atlantic Advisors Asset Management, Bennet Sedacca brings with him more than 26 years of securities industry experience. From 1981 to 1997 he worked for several major investment banks, specializing in high-grade fixed-income securities marketing, trading and portfolio management. While working for PaineWebber as a Senior Vice- president, Bennet was a member of the Chairman’s Council for four consecutive years. During his years with Salomon Smith Barney as a Vice-president, he established an institutional fixed income presence in Central Florida.
In 1997, Bennet formed Sedacca Capital Management focusing on portfolio management for high-net worth individuals and small to mid-sized institutions. He is also a contributor to the financial website, www.minyanville.com and is regularly quoted in Wall Street Journal Online, Barron’s and Bloomberg.
Bennet graduated from Rutgers University in 1982 with a degree in Economics and was a member of the International Honor Society of Economics.
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