Things have not looked this gloomy for quite some time. Comparisons about previous recessions and depressions still fill the 12-second sound bites and negative news is everywhere. Of course, if you continue to watch the news you may be wondering if you are going to have running water next week.
Well, what does it all mean? Very simply, the pendulum has now swung too far in the negative direction. Yes there are problems and yes we need to get a better grip on easy money policies, price inflation, and a host of other financial woes, but the fear is much worse than the reality. For at least 6 years financial writers and financial analysts have been talking about the derivate time bombs about to go off. Well they did, and the financial writers were vindicated.
| Now we are here, and the good news is, we are fixing the problem. It will not be perfect, but markets will be more efficient in the long run. |
Taking Inventory
Stocks have not been this cheap for quite a while. It is almost unimaginable that we have seen some of the greatest growth in the markets, and now we are seeing the lowest thresholds in the cycle, all this in our lifetime. Inefficiencies in the markets have created opportunity where there was none just 3 months ago. It may not be pretty, but there is opportunity knocking. Stocks are cheap and probably more hated than any other investment class at this very moment. Add on tons of fear, low price-to-earnings ratios, and loads of disdain; I like those odds.
Consider that most of us will need to put our money to work at some time. The choices are the mattress, the bank, gold bullion, real estate, bonds, a new business, or the stock market. I am certainly not suggesting that you run willy-nilly back into the fire that may have just burned you. I am, however, saying that the glass that looks half empty is still half full. For the people with the right attitude, there are going to be a myriad of business opportunities going forward.
As an example, there have been massive losers, Lehman, but there have also been massive winners. Take note of all the emerging new companies, JP Morgan, Wells Fargo, Bank of America, and many more. How would you like to get a dollar’s worth of assets for 2 cents? Some of these companies really did just that. And we are nowhere near the end of the market that created inefficiency and opportunity.
What about Safety
Today safety has a whole new meaning. Having safe investments has proven to be just as frightful as taking risks. The paradigm shift that is occurring is not a market or an industry; it is you and I, the humans. I know we would all like to go back and take the blue pill and remain in the matrix, but that bus, along with Elvis, has left the building. I suppose, with much consternation, a little revolution now and again is good for the soul.
Seeing is believing
In the last 30 days, I have been literally around the world, from Europe to Asia to the U.S. and I can say with firsthand knowledge that life, as we know it, is not ending. The traffic, the shopping malls, and the businesses I have visited are all busy and bustling. Yes, I know what the charts on savings rates tell us and what they warn of the future, but I am more optimistic about the markets at these levels than I have been for a long time.
The fact is that the inefficiencies of the markets have created the biggest gaps for opportunity in our lifetime. The opportunities are not just stock-related; they are in all walks of business. No doubt there will be winners and losers moving forward. The current disconnections represent opportunities of all kinds.
Housing and Real Estate
The credit markets, though slow, are just starting to revitalize. It is interesting that in some markets, real estate developers with cash on hand are renting condos instead of selling. Hmm, wonder why? Real estate will take longer to right itself, but there is still opportunity.
The downside, something that should not be left out, is that real people have been hurt in very significant ways. There is not a day that goes by that I do not get a phone call from someone who has really had their guts ripped out, which is extremely disheartening. Having said that, in each case, the person or company could have ended up differently if they had added the tools of Asset Protection to their business and personal life.
The wake-up call for all of us is that business planning, estate planning, and Asset Protection need to be part and parcel of your life.
In all but one of the cases I worked on in the past 60 days, I could have helped the person before their trouble was overwhelming.
We get more safety by proactively creating a favorable environment. My sound advice: Stop watching the news and ground yourself with education and research about the new opportunities and doors that are open to you, your families, and your businesses.
It is truly time to view the world, and notice the word “world” in a whole new light, the light of opportunity.
