Forget Jesus, What Would Pollyanna Do?
July 17, 2008
People tend to toss around the Pollyanna label pretty freely, often using it in its most simplistic formto define someone, as the American Heritage Dictionary does, as foolishly or blindly optimistic.
But as with any cultural reference, the simplified version doesnt tell the whole story. So I got to thinking that before I write another optimistic column, as seems to be my tendency, Id use my crack journalistic skills and get the Wikipedia 411 on little Polly.
Apparently, Pollyanna (before being left an orphan) learns her philosophy of optimism from her father, who teaches her to play The Glad Game. The game consists of finding something to be glad about in every situation. It starts one Christmas when Pollyanna, who is hoping for a doll in the missionary barrel, finds only a pair of crutches inside. Making up the game on the spot, Pollyannas father teaches her to look at the good side of thingsin this case, to be glad about the crutches because she doesnt need them.
This is totally warming your heart, isnt it? I know it is. But get those tears out of your eyes, because here comes my brilliant leap to the leveraged finance markets!
There are, and I mean this, a number of things to be glad about these days where our markets are concerned. Especially for certain folkshigh yield bond and leveraged loan investors, to name some. You guys have got the run of the market. Deals on the primary are taking so much longer to get done because investors actually have bargaining power where pricing is concerned. And speaking of pricing, one of the main reasons weve seen some slowdown on the primary markets is that portfolio managers are treasure hunting on the secondary and finding deals that may not have been interesting at yesterdays prices but are pretty compelling now.
Mezzanine lenders also have reason to smile, as mezz tranches are beginning to creep up in size and are being used more often in larger deals.
Even former Bear Stearns employees and battered financial stocks have managed to bounce back. Bear alums are popping up in new gigs all over place. And the Securities and Exchange Commissions move to curb improper short selling, which takes effect Monday, caused financial stocks to rally this week.
So next time youre tempted to look at housing starts and inflation and consumer and investor confidence and take the Chicken Little route, remember little Pollyanna. Who, after getting hit by a car and losing the use of her legs, decides she can feel glad that she had legs. (p.s. She does walk again, and is able to appreciate the use of her legs far more because of her temporary disability.)