Financial Market Cycles: When Virtuous Circles Become Vicious.
The capital markets, the economy, and Wall Street firms all experience cycles. For capital markets, the cycles consist of bull and bear markets; for the economy, boom and bust. For Wall Street firms, the cycles are of financial innovation, risk-taking, limit-pushing, and hefty compensation, followed by retrenchment, revulsion, write-offs, and layoffs.
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Direct Link - Baupost 2007 year end letter excerpt. (PDF)
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