I am an eternal optimist. Life is so much more fun and fulfilling when one is positive, smiling and making the most of every opportunity. Over time I have learnt to listen to myself and do things that most others don’t. If we want to create wealth, we need to apply that philosophy to every area of life. I’m sure those who didn’t listen to all those TV Gurus six months ago, must be smiling their way to the bank. At the same time those who didn’t benefit from the Crash, please don’t lose hope as it is still not over.
I find it hilarious when people treat the government as some sort of messiah that will fix every problem. Millions of jobs being lost in America and major banks and automobile companies going bankrupt overnight isn’t something that can be fixed by any government.
If we study history, we can see a common trait to all Crashes. In the beginning, most people talk about extreme euphoria and don’t believe it. Then after it sets in, within a quick time span there is an artificial recovery and many common people think, things are good again. But them main reason for that artificial recovery is that big investors and people on the inside, want to exit their investments and trap the ignorant masses.
Way back in 1930, after the Crash of 1929, there was a similar recovery. Everybody started talking about how things were good and everything was back to normal. Economists and world leaders were saying, don’t worry anymore things are good. However, post that things got much worse for a few years, before the world saw one of the most incredible periods of growth.
Once again the reason I am saying this, is not because I am pessimistic about India, but I don’t want our fellow Happionaires to take unnecessary stress and run behind a raging market. I don’t want you to be caught in a 800 points downfall and curse the markets and your decision. On the other hand if you have bought something at low levels or even at higher levels, you can surely keep it for the long term. If it is a good company, you have nothing to worry.
As more financial institutions go bust in the West, money is going to dry up. The world is now soon going to see extremely high interest rates and higher gold prices. I won’t be surprised if interest rates in America rise over 10-11%. I know most economists won’t agree, because interest rates are so low there that money has lost its value. But we just need to wait and watch. Real money is becoming very scarce there.
Jobs losses and foreclosures are on the rise. Even in India, lakhs of people have defaulted on their home loans, especially in urban areas. I was sitting with a banker with one of India’s biggest banks that had funded home loans and he very honestly told me that even if interest rates go down, they are hesitant to fund home loans as they have so many defaulters. He told me how the government was trying to bail out builders by lowering interest rates, but if people are afraid of losing jobs and have no money they wouldn’t buy such overpriced homes.
The Crash in real estate is yet to come in prime urban areas; it will take several decades, for real estate to reach back to the overpriced levels of 2008. Do not believe planted reports in the media about a real estate recovery. These have been planted by builders to misguide the masses. I like visiting construction sites and empty buildings for sale in the real world. The situation is so bad, that many builders are forced to announce low cost projects in distant suburbs just so they have some cash flow for survival. The real world is where we need to get our knowledge from and not from planted advertorials.
In many ways, the full intensity of the Crash is yet to be seen by most people. It will shock many, but for the few who are informed it will be an opportunity not to be missed and an occasion to create immense wealth. I hope more Happionaires look at it that way and are prepared with knowledge to make the most of it. Do you agree?
Have a great weekend and have fun with your family!
"Cash The Crash helped me learn to analyze companies and I made over 30% be investing in the company shared. An extremely entertaining and exciting read that every investor must read.” -Dr. Sunil Chopra
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