Peter Ricchiuti

The economy is inherently cyclical. While these cycles don’t necessarily repeat themselves, they usually rhyme. “The financial markets often foretell what’s ahead for the economy. This can illuminate opportunities and serve as valuable storm warnings for business leaders. A lot of this runs counter to what people are commonly hearing in the media.

Outline of topics covered:

The decisions made by business leaders and investors during tough times determine their relative condition when things improve. Decision makers need the proper tools to correctly balance survival and opportunism. Making the right calls involves blocking out the noise and remembering that if a majority of the people were right, … a majority of the people would be rich.

Trees don’t really grow to the sky and downturns eventually find some kind of equilibrium point. In times of great optimism and great pessimism we tend to lose sight of historical economic patterns and valuations. Unfortunately, for many each time is the first time. The buzzing background of the 24 hour news cycle only serves to make this worse. We will look at indicators that deliver perspective.

How high is too high? The truth is that no investment is either good or bad. It is all a function of the price that you are buying or selling it at. This kind of thinking is often ignored in a market frenzy. It’s often tough to trust your instincts, focus on the historic patterns and not get swept up by all those talking heads. As economist John Kenneth Galbraith once said “there are two kinds of forecasters, those that don’t know, and those that don’t know that they don’t know.”