Recession self help question

[cnwoods]

I've read that a recession is the time when more fortunes are made than any other, and that there are more opportunities around when times get tough.

I'm pretty sure I believe this, but I need to know what kind of things would be the most important things to do if I want to succeed regardless of the economy, and how can I make sure I avoid being someone who struggles to survive it, or even goes under?

Thanks

[now or never]

I'm pretty sure I believe this, but I need to know what kind of things would be the most important things to do if I want to succeed regardless of the economy, and how can I make sure I avoid being someone who struggles to survive it, or even goes under?

Undertaker

[funchy]

To make money in a deep recession, there are two ways to approach it:

Pick a business/industry that is recession proof, such as medical care. People need doctors and medical care no matter what. People need inexpensive goods, so discount grocery stores and dollar stores are faring better than other retailers.

Option #2 is be a bottom-feeder and profit off others' misfortune. Buy their assets for a fraction of cost and either find a market for them now or hold them until the market improves. Or profit off their misfortune by doing a service needed more in hard times: debt collections, repo, pawn, high-risk loans

[Kirill Pojev]

You'll probably laugh, but truly reliable and stable recession proof business are the funeral agencies. Even though it might seem like being a minor market from initial point of view, in reality it is a billion dollar niche.

Another industries that will most likely boom within upcoming decades are alternative energy sources (e.g. solar panels) or recycling and environment friendly production (e.g. used motor oil or plastic bottles -> diesel). These industries are usually strongly supported by the government subsidy.

[MartialDev]

John Templeton simply bought stocks in every company, and waited for their recovery to make him rich.

Of course, there were many more like him, who bought a little too early or too late...

[Kirill Pojev]

Originally Posted by MartialDev

John Templeton simply bought stocks in every company, and waited for their recovery to make him rich.

Of course, there were many more like him, who bought a little too early or too late...

Funny strategy indeed...
This might only work if you possess solid financial amounts, millions USD. Also I believe it unreasonable to just purchase shares of every company with the blind hope for potential income. I would diversify my portfolio by acquiring shares of actual loosers within each cruicial industry (finance, automative, energy, medicine, IT etc).

[escapee]

The following financial advice is the Crème de la Crème in the current deflationary environment . Take it with a grain of salt and DYODD.

Safe Haven | How I Saved My Parents a Small Fortune! And the Advice Ive Been Giving Them!

Read it before dumping your hard earned money on market or real estate.

[MartialDev]

Originally Posted by Kirill Pojev

Funny strategy indeed...
This might only work if you possess solid financial amounts, millions USD...

IIRC, Templeton did not have any money to invest at the time...so he borrowed it!

Now that may sound crazy, and it may be crazy, but consider that the US government is using this same strategy today.

[Kirill Pojev]

Originally Posted by MartialDev

IIRC, Templeton did not have any money to invest at the time...so he borrowed it!

Now that may sound crazy, and it may be crazy, but consider that the US government is using this same strategy today.

It is a truly "playing on the edge" strategy. Nevertheless I think something is missing in your story. For example, how did he manage to get such a huge credit without any strong assets? How did he manage to cover monthly or quarterly % for his credit if all his borrowed money were invested into shares? If my understanding is correct, we are talking about millions US dollars, am I correct?

[sbdiane]

People always need toilet paper.

[Brutha]

A recession is a time where people want alternatives to the status quo.
Go out and provide those alternatives.

[MartialDev]

Originally Posted by Kirill Pojev

It is a truly "playing on the edge" strategy. Nevertheless I think something is missing in your story. For example, how did he manage to get such a huge credit without any strong assets? How did he manage to cover monthly or quarterly % for his credit if all his borrowed money were invested into shares? If my understanding is correct, we are talking about millions US dollars, am I correct?

I believe we are talking about a few thousand dollars, in 1940 money, returning an average of 100% each year for many years. I don't know who made the loans.

[Kirill Pojev]

Originally Posted by MartialDev

I believe we are talking about a few thousand dollars, in 1940 money, returning an average of 100% each year for many years. I don't know who made the loans.

Here is the short excerpt from Wikipedia: "He [John Templeton] is noted for buying 100 shares of each company trading for less than $1 a share in 1939 and making many times the money back in a 4 year period". It clarifies the situation

Here is the link to complete Wikipedia article: John Templeton.

[Gemini15]

It is important to understand that many people in a recession are not adversely affected. In fact they are better off! As a result there are opportunities out there that are available.

The people whose income doesn't fall during the recession and yes most people probably fit into this category are the ones who can gain out of this downturn.

At the moment interest rates have reduced around the world, so people on variable rates are either finding their repayments are lower (more money in their pocket) or are paying more off their loan (loan reducing faster). Also fuel has been reducing of late so again more money in our pocket.

At the same time, some people are affected and they make decisions accordingly. Possibly they have to sell their house quickly and will accept an offer that is lower than expected. This is an opportunity for someone to gain.

Also the share market has gone backwards and not all of the companies involved are affected by the recession. Perhaps the share price doesn't really reflect true value. Again a buying opportunity exists.

These opportunities will exist on a regular basis while a country is in a recession. It is a matter of observing and being ready.

[Ninfoboo]

Originally Posted by sbdiane

People always need toilet paper.

Lol, too true.

I'd definitely say the $1 store is a good idea. (as mentioned by funchy). They must be doing way more business right now than before, I'd wager.

[ar81]

[joker mode]
Recession proof business is to sell heaven to extremists...
Once they die, there is no refund, there are no operating costs, no overhead...
[/joker mode]

In a time of recession, save money, tight your belt.

[LordSappington]

Buy index funds. The S&P 500. If you think that we're going to turn around any time before you retire, this is a no brainer. All of the companies are on sale now. Even if it drops another 10%, it is likely to more than recoup that later.