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When A Sound Concept Overstays Its Welcome
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
How a sound investment concept can get out of control… Private credit emerged after the Global Financial Crisis… Now they are offered in ETFs… LBOs in the 1980s followed a similar trajectory… Only time will tell whether private credit will escape that fate… The spending will never stop… Kinsale earnings explained… |
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Editor’s note: Today, Porter turns the Journal over to Distressed Investing senior analyst Marty Fridson.
Marty has a long background in trading, investing, and finance… Investor’s Digest called him “the most well-known figure in the high-yield world.” Over a 25-year span with Wall Street firms including Salomon Brothers, Morgan Stanley, and Merrill Lynch, he became known for his innovative work in credit analysis and investment strategy.
In today’s Journal, Marty talks about the remarkable growth in the private-credit market over the last decade… and how it might be getting out of control.
Here’s Marty…
Private credit has entered the “excesses” phase.
Many new Wall Street investment categories follow a familiar trajectory:
It starts with a sound concept, hits rapid growth, then expands into excesses, followed by blowout, and then possibly reform and revival… or not.