The US market is going through it’s WORST financial crisis in decades. The US market indexes like the Dow Jones, S&P 500 and Nasdaq have plunged more than 25% from its highs! Once revered ‘indestructible’ financial giants like AIG, Lehman Brothers, Bear Stears, and Merrill Lynch are/have come crashing down. Citigroup that once traded at $50, is now down to $13. Lehman Brothers than was once $90 is now bankrupt. Merrill Lynch that was once $80, is now $20. AIG that was once $80, is now $2. Global corporate Layoffs have just started (BT report 17 Sept: HP to slash 24,000 jobs worldwide).
In Singapore, the Straits Times Index is down MORE than 30%. UOB, once at $24, is now at $15. Capitaland, from $8 is now $3+. Property prices are down 10%-20% from a year ago. The last quarter of Exports have contracted, and Singapore could be facing another technical recession in the coming months (Straits Times Report 17 Sept).
While many people are panicking and fear can be smelt in the air, Far-sighted Entrepreneurs and Investors like myself are LOVING IT! (not that we ate any McDonaldsâ€™s burgers)
So Why Do I Love These Downturns?
I may sound crazy, but most people do not realize that economic slowdowns and financial crisis are where fortunes are really made.
It was the last two crashes of 1998 and 2002 that gave me the opportunity to make my first $1.5 million; by buying into great stocks at huge discounts and turning an $8,000 investment into a $30m a year business. It was the recession that allowed me to hire so may great people at such low salaries, take up a 12,000 square foot office in the heart of CBD at just $4 per square foot. It was during the crashes, when NOBODY wanted to own stocks that I bought great blue chip stocks at 50%-80% discounts below their true value. It was during the last downturn that I bought my Semi-D at $1.6m, which is now worth $3m!
Now…it is ALL HAPPENING AGAIN!!!! In fact, this crisis is turning out to be even more severe that the previous two. For those of you who know how to take advantage of this will become the next group of new millionaires once the market turns around.
How Do You Take Advantage of This?
Remember that history ALWAYS repeats itself. After every bull run (rally), there will be a pullback/correction/crash (which is what is happening now). After every crash, it will be followed by the next rally/bullrun. In other words, the market will ALWAYS RECOVER and GO EVEN HIGHER!
However, NOT ALL stocks will recover. The weak and fundamentally damaged stocks (i.e. Like AIG) may never recover. The secret is to learn and start buying up the fundamentally strongest stocks when they are cheap & NOBODY wants them (during the downturn). When the market turns around, they are the ones will recover even stronger and make you your fortune.
Let me give you a free tip here. Before the crisis, there were Five Big Investment Banks in the US: Lehman Brothers, Goldman Sachs, Merrill Lynch, Bear Sterns and JP Morgan. Now that Lehman (bankrupt), Merrill (bought over By Bank of America) and Bear Sterns (bought by JP Morgan) are gone, guess who is going to benefit and become even stronger after the crisis…the survivors! i.e Goldman Sachs and JP Morgan.
In Wealth Academy (My Live Event, next one is Nov 13-16), I teach people how to identify the strong companies from the lousy ones and to buy them up cheap, when the whole market is fearful. When the market turns eventually, they will reap handsome profits from putting their money on the strong horses.
I have also invited Five of the Top Investing and Trading Experts from Wall Street down to Singapore for Asiaâ€™s First Investors Superconference from 25-26 October. Check it out at www.akltg.com/superconference. So, if you want to be one of the smart ones who will protect your wealth and benefit from this crisis (instead of being fearful of it), some come and join us for our live events.
â€œ Be Fearful When Others are Greedy and Greedy When Others Are Fearfulâ€ – Warren Buffett, Worldâ€™s Richest Man
The Best Time to Start a Business is in a Recession
Another reason why I love recessions is because it is the BEST TIME to start a new business is in a downturn. Why?Let me give you a few reasons:
1) In times of recessions, the company you work for may decide to lay you off (to cut their costs), the best way to protect yourself is to already start thinking of building additional income streams…like a part time business. I teach people ways to start businesses with little or no capital…just hardwork and ideas put into use.
2) Recessions are when you can get really cheap rentals and hire great talented staff cheap. Think of the so many people who just got retrenched because their company went bust. There could be more to come..
3) IN recessions, many customers look for cheaper alternatives, which gives you the best chance grab market shares from the market leaders (the bigger, more expensive companies)
4) In recessions, the bigger players become more defensive, scaling back on their advertising and staff, which gives you the best opportunity to again, grab their market share
5) In recessions, interest rates are really low which means you can borrow money cheaper to finance your investments! When I bought my properties during the last downturn, my interest was only 1.5%!
This is precisely why I just launched my MILLIONAIRE BUSINESS ACADEMY training that is coming up 27-30 November. To coach business people to build their business during a downturn and to help newbies get started. Call 62740105 or check it out at www.millionairebizacademy.com to find out when I will be conducting a free introductory seminar.
I wish you the best in making your fortune in this downturn
Haha… Adam, are u teaming up with Sant Qiu to run the MBA?
Is the MILLIONAIRE BUSINESS ACADEMY training will launch in Malaysia?
I had the same opinion about making the right choice during the worst times. I like the way you put the toughest situations in simple words, helps us understand it better (as a student). I hope you conduct a seminar in India too someday.
a real motivation booster..
though not many people are aware of this concepts and thus end up making the downturn an even worst time for those who want to stay positive.
I agree that recession creates opportunities, but this only for people who know how to take advantage.
It’s a good idea to run a seminar that teaches those people how to take advantage. I look forward for your next seminars.
Hello Adam, is it possible that this American recession touches other continents? I was reading about Asian market crash too on Yahoo yesterday. Is this true?
Hi, MR Adam Khoo! Thanks for your free introductory workshop on 3 oct 08. It inspires my boyfriend and I so much about basic investment and diversification of it. However, It’s quite sad that we can’t attend the 4 day camp because of the examination and work. May i know when is the next camp? So i can apply annual leaves!!!
hi Mr. Adam Is there any possibility that you will be coming to malaysia ? I am a new reader or yours and gain strong interest in it.. am now looking forward in attending your workshop.. hope to see you around in Malaysia..
Adam, what’s your advice if/when short-selling is actually banned (like some countries already do?) Does it mean that the days of profiting from bear markets are coming to an end?
In the first place, I NEVER advocate short selling. If the market goes against you, you can suffer UNLIMITED risk of loss
Instead, a safer way to make profits as the markets go down is to purchase PUT OPTIONS. Put Options have limited risk of loss while still giving you the opportunity to make high profits