Monday, November 24, 2008
Reflecting on the economy
|Recently I escaped to one of my favorite places at this time of the year: Park City, Utah. However, being surrounded by snow-capped mountains and the serenity of the scenery could not completely remove me from lingering thoughts of the economy and financial markets. The industrious guy who works at the local restaurant and shovels snow was interested in my thoughts and advice on how to navigate his way through these challenging times. While there is no silver bullet to fend off the bear market, I began to envision a strategy to help combat the defeated frame of mind that many of us have adopted and instead develop a fundamental and competitive will to overcome. This strategy requires us to identify concrete priorities, understand the strengths we need in order to persevere, as well as analyze the weaknesses that threaten our prosperity the most.
As an avid polo player and intense competitor on the field, I think a good defense is the best offense in a bad economy. Companies need to first take corrective measures and get out of debt as soon as possible. Taking internal, restorative action is the key to preservation when a company is hit by a financial storm like the one we are experiencing now. Although it may be hard to bounce back swiftly, this is not a time for us to be passive. We need to proactively shed debt, reduce excessive spending and become liquid. Taking action now is the key to surfing the rough economic seas. The right people always emerge out of rough times. Those with foresight, focus and fortitude will ride the wave to calmer seas rather than those who are struggling to tread water and feel stuck in survival mode. The key is to not allow our businesses to sink with the economy but to deal with the financial crisis and develop strategies that address the immediate problem and support a long-term plan.