Monday, May 16, 2011

Are there Investment Opportunities during Economic Downturn?

A public opinion poll is no substitute for thought. Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars. Warren Buffett

The world economy is in recession! For a long time, we have been hearing this statement from friends, governments, International Monetary Fund, World Bank, Central Banks etc. Real Estate Market is down; stocks are in shamble, mutual funds made huge losses, be careful hold on to your liquidity, do not make foolish investment decisions – have been the grapevine around coffee tables, pubs and golf courses.

Having said above, there are many financially literate opportunists that were able to crack business deals worth billions of Dollars. One recent example is $ 8.5 billion Skype buyout deal by Microsoft Corporation. If the times are challenging, I wonder why aggressive corporate entrepreneurs are making new investments, from where are they making money and parking it in money making opportunities?

Perhaps they are the intelligent once and are able to interpret the insights of businesses with open minds and turn these challenges into opportunities. They are able to tap into hidden opportunities, no matter how bad the economic indicators are. Or they are planting seeds today in the hope or sweet fruit in the times to come?

I was training a group of senior businessmen, and ethos of my session was “Investment Opportunities”. Although, belonging from wealthy business families, it was a depressed bunch of people. At least for the first hour of my session, I kept challenging their ability to improve upon their superficial way to looking at opportunities, and some of them started reacting! Off course I was expecting that.

After coffee break, said, if the business climate around you is so sickly, why are you in still in business? The fact is that your respective businesses are sustaining economic pressures; you are employing staff, producing goods, competing with other market players, paying for your luxuries. I went on and said:

“You are managing your business well. The only thing that is missing in the equation is your boldness to start investing in opportunities”.

They were astonished and started realizing the fact! Let’s discuss how you define opportunities, I said. They were thrilled, and over the next five hours the group came-up with a number of potential investment opportunities.

In my view, the general notion of being careful turns in to being lethargic during the time when economies are slow. But those with ability to understand that challenge are always willing to take calculated risks and are often successful!

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