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Distressed Investing 2009: Harvey Pitt's top 10 lessons of the economic crisis

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Published January 23, 2009 at 9:30 AM
pitt.gifAt the TMA/The Deal's Distressed Investing Conference in Las Vegas, Harvey Pitt, former SEC chairman and CEO of Kalorama Partners LLC, outlined the top 10 lessons to learn from the current economic crisis.

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  1. The valley of transparency is clear. Decisions should not lack transparency and effective analytical tools to understand. 
  2. Build trust -- careful and thorough due diligence must precede a transaction. Don't be self-medicating: You must look for problems before they look for you. An ounce of prevention is worth a pound of cure. There are no points for identification alone.
  3. The golden rule is risk management -- the existence of and adherence to good risk management.
  4. Financial realities and relationships will be remade by this crisis. 
  5. Being smart is good. Being too smart is dangerous. Sometimes circumventing obstacles is appropriate but. ...
  6. Haste makes waste. Firms with significant exposure made hasty decisions, and these decisions will haunt them for years.
  7. Heed unconventional wisdom. Crisis survivors march to a different drummer.
  8. If you don't speak up, no one will hear you. There will be a window that will strongly influence the outcome of the regulatory landscape and what it should look like at the end of the process. A friend in need is a pest, like a wedding crasher. Get to know regulators and legislators before you need them.
  9. It usually gets worse before it gets better. Investor confidence has been threatened if not destroyed over the last 18 to 24 months.
  10. Maintain a sense of humor. If you don't laugh, the pain will only be more severe.
- Maria Woehr

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Comments

From: Renee Fellman,

The most important rule of the conference came indirectly from David Shapiro of KPS Capital Partners ( http://www.kpsfund.com/davidshapiro.asp)who revealed that their "adult incontinence" products company is actually doing well--even in this environment.

There's an important lesson there....

Posted on: January 25, 2009 11:50 PM


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