This applies to financials as well, but many value investors lost a lot of money on financials because they ignored credit quality near the
end of a credit boom.
Corporate markets were booming, and transaction - driven law firms were really just getting into the
swing of the credit boom.
Investment banks tend to be thinly capitalized, and even more so past the
peak of a credit boom, when events like this happen.
Despite the bailout passing in Congress, there are serious concerns that consumers and businesses will undo «more than ten
years of a credit boom.»