So, in pricing, allocations, et al., particularly in private and illiquid assets, just what is one to do?

Another sage, Ben Graham, had that right, too, though his wisdom centered on tradable equities: the answer lies in one's margin of safety.

With both M&A and private equity coming off of banner years, with predictions (or wishful thinking) that only more of the same is possible, we may be near the point at which pulling back makes sense. True, some argue that the credit cycle may not be as important as it once was, implying that its inevitable turn may cause a wimper more than a howl among investors and traders alike, but I'm not so sure.

Unlike the past, when commercial lenders and insurance companies were the primary source of debt for recaps, buyouts and other change-of-control transactions, hedge funds are significant players today. And while the former relied on credit committees, covenants and process for making loans and dealing with under or non-performing loans, the latter - for the most part - are more apt to shoot from the hip.

One of the elements of this credit cycle's end that will surely be different is the effect that these notable absenses (credit committees, covenants and process) will have when the inevitable restructurings, pre-packaged 11's and liquidations begin. We may not know how and when the cleansing of market excess will play out in specific terms, but cleansed it shall be.

And so the fleet-footed will make money, and the merely prudent will not lose it.