A once in ten year opportunity

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There is no doubt that currently, every business and individual is headed towards some challenging times. The spread of the Corona virus will affect everyone in some way in the near future. The greatest chance of such effects will probably be economically. The slow down in key industries, including travel, transport, logistics, supply, just to name a few will be huge. These impacts will flow onto businesses, both large and small, and finally down to individuals. In short, it seems pretty assured that it won’t be long before we are officially in recession.

Economic downturns are nothing new however. That happen with surprising consistency and regularity. Here’s a brief history recap:

2020 – Corona Virus

2008 – GFC

2000 – Dot Com bubble burst

1997 – Asian financial crisis

1990 – Currency crisis and the Australian recession ‘we had to have’

1987 – Black Monday stock market crash

and so on.

If you look closely a these events you’ll see that are typically spaced around 10 years apart. Not always. Sometimes longer. Sometime shorter but I reckon it is a pretty safe bet to say that we live in times of a 10 year financial cycle from bust to boom.

Theories on such cycles have been establish by everyone from Kondratiev to Ray Dalio and are worth taking a look at. No one theory contains all the answers, but inside most is a piece of the puzzle for those willing to look.

The worrying thing is that we really haven’t fully recovered from the last downturn thanks to GFC even though we have enjoyed record low interest rates. The problem is now that the next economic shock is here and governments no longer have interest rates as a tool to “stimulate” the economy. It would seem that the only way they have left to make money ‘cheaper’ is to print more of it (known as qualitative easing). Many will debate the ability of such an approach to stimulate the economy, and I will leave you to do your own research on that, however my expectation is that such an approach largely benefits the few well off while disadvantaging the majority who see the purchasing power of their savings fall as government printed money (with no backing but merely what the government says it’s worth) floods the economy.

As bad as things look to be shaping up, there is something positive to remember here. Every threat also brings opportunity. However, opportunities are only available to those who position themselves to take advantage of them early. Thus, what I’m saying is that you should be preparing NOW if you want to firstly ride out the coming storm and secondly, if you want to take advantage of the opportunities that will arise because of it. Remember, the Bible tells us that Noah built the Ark BEFORE it rained!

In technology terms, many large business like Microsoft are now touting tools like Microsoft 365 and Teams as ways to work from home and limit the spread of the Corona Virus. Cleverly, they are also offering these tools for free:

Microsoft commitment to customers during COVID-19

This is a very smart move, because as bad as the situation may appear at the moment, it will not last forever. Just like the GF, Dot Com bubble and so on also didn’t last forever. Yes, there was a pull back, but once the threat had passed the economy continued to grow and the business environment did so as well. Chances are that it will be exactly the same this time as well. We just don’t know how long the downturn will last as yet. However, helping people and business today is going to get them on board with what you offer, from which they are unlikely to change as times improve. It also positions you as a ‘helper’ not a ‘panicer’.

What transpires in the short term with Corona Virus will determine the extent of the challenge we all face. That remains the unknown. That’s why now is the time to ensure you have your house in order and you make sure you are prepared for the downturn that is coming. Then and only then can you look externally for the many, many opportunities that will present themselves going forward both personally and professionally.

In short, right now is the unique opportunity in time to set yourself and your business up for the next 10 year up swing that will inevitably follow the current short term outlook. The smart player looks where the ball is going, not where it currently is!

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