World finance crisis, the “worldfinancecrisis”

Salutti!

In my last post, I listed some indicators, which also belongs to a finance crisis. And what I expected started to set in. The miss of most economist is, that they can explain you how the crisis or a failure has happened, but they can’t tell you in advance ;-)

Since 1929 the world-market has suffered many crises. They had always similar cycles.

Basically you may list some points:

- economic slowdown
- pessimistic assessment of the economic climate
- downturn of demand
- overfilled stocks
- reduction of overtime, start of reduced working hours
- missing investment
- retirement of production (-facilities)
- falling interests, prices and salaries
- bears (sinking prices)

Do some points already seem familiar to you? Have you already declared some of these points around your environment? Well logically ‘yes’.

What does it mean? Should we panic?

–I always say (mainly around the German speaking Europe):
“You can start to panic, if your croissant in the morning costs you less then 5 cent!”

We’ve got a challenge, and in this challenge there are also hidden opportunities. If you can, you should start to invest now! Invest in shares of companies, which their market value is deeper than the intrinsic value. Last time I offered you some company-names of European houses. But they’re all over the world. For example, you know a company whit plenty of Hi-Tech stocks but right now nobody can afford a large cargo. So they sit on their stocks and their order book is empty – they don’t gain any win, and so their market value at the exchange fall. In fact they’ve got a higher value already because of their stocks! –But the exchange struggle them down, because they just look at their order book… (Very simplified example)

Or if you’ve got really nuts, be self-employed if you lost your job! Remember that the risk to fall is higher then ever, but if you can hold through this crisis, I estimate, that either you’ll find easily a new employer or your own business will set out as soon the crisis is over…

But after all, don’t forget one thing: After a recession comes a depression! From there on, you start again to see light at the end of a tunnel ;-)

So in other words, be always smart in your approach to the market. Handle it in a way like it would be a small child. –It will cry easily but than it will be again happy the moment after. Finally it needs you, but it’s also your responsibility, how you let it grow up.

Right now, I’m self-employed. I’ve got two mandates in the financing sector and try to survive. I’m absolutely certain, if I can go through this phases, an employer who also passed through it will be in need of one’s peers. The question left is: How long will it go? –I expect around end of 2009 start 2010… But I can’t confirm that, it’s just like anything else estimation. No one has got a crystal ball, right?!

Today’s motto: Courage is being scared to death - but saddling up anyway. John Wayne