The easiest route these days is getting oneself tied in the bandwagon of doomsayers, who constantly stress frail outlook is definitely in store next year (or even a year after 2009). We will not delve further into “bankruptcy” or the “R” word (it’s readily visible in headlines anyway), but on the “balancing” link that is very much in demand to rectify this view.
Witnessing how global equities markets move has become tougher, especially if one monitors it on a daily basis. In fact, investing these days is not for the “faint hearted,” as it would definitely take deeper guts to buy the concept of “fresh perspectives.” With a bleak outlook expressed left and right on the state of the global economic terrain, the “most expensive” buy-line nowadays, is “positivism.” This is among the crucial steps one should take prior to equities investing, and upholding this decision before taking any position.
History has repeatedly shown that markets behave in a scheme where “excesses” are corrected. These excesses have linkages to policies (whether macro or micro in nature), and pinpointing where the problems arose. In fact, problem identification is a skill that is developed through time, set against the backdrop of any trader’s experience, correct analysis, thorough reading and obtaining “perfect information.”
In fact, “cheap valuations” are no longer the focus of arguments. Beginners to stock market investing would only need to look at chart trends to check how far stocks have come off from their highs, and how low they’re getting into if they make a decision to buy. Similar to negotiations, several have embraced a segurista concept, to ensure they’re timed to get in at the “cheapest” lows, and besting others by cashing in on the “highest” high.
True to form, “perfect trades” are actually “non-existent.” One should therefore decide on circumstances prevailing at a specific point in time once a purchase is made, and vice-versa when a sale is effected. Comparatives relative to events only come in later, simply to give any prospective buyer or seller a good pat on the back that a perfect trade was executed, within a well defined timeframe. This is the key objective of “contrarians,” or those that go against the trend when everyone else turns pessimistic. Remember, events continuously unfold daily, and everyone would have been billionaires, if all possessed special gifts to spot the “lowest” point in business history.
Consider this view: Business tycoons would not have achieved their pillars, if at some point they did not decide if they’re prepared to take risks. Taking their enterprise to the route of “going concern” policy, these brave businessmen have taken the bold step to prepare themselves both for the good, and of course, for the worst. The weak aspects, however, are negated by proper contingency planning, especially by keeping an open mindset that risks can be mitigated when business models are re-tooled. Such “re-tooling” exercise is a constant discipline embraced by all, to help decision-makers weather the peaks and troughs in any business cycle. Among the clear examples we see include expanding the scope of earnings mix, or adopting less-expensive technology to streamline the administrative route. “Value engineering” is also starting to take notice, especially on the aspect of boosting productivity by adopting a discipline to uphold the least possible non-essential cost.
Getting everyone to believe that “global solutions” are available for “global challenges” is the first stride to recovery. Note, however, that positive thinking also requires a lot of action, to revert to sustainable mending. All of us are contributors, because any single effort “becomes a foot on the door”… and taking this, “one toe at a time.”
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For inquiries, e-mail grace.cerdenia@2tradeasia.com or grace.cerdenia@sourcepilipinas.com.