Be Greedy In This Economy
Don't let the tough economy get you down. Take advantage of it, instead.
The New Year has brought with it some tentative times for investors. This uneasiness affects not only those investing their personal savings, but also those investing in their business. Although, relatively speaking, the machine tool industry has held up pretty well over the past year, the general economic mood has still had a negative effect on purchasing, causing a considerable slowdown in recent months. But the news is not all bad.
According to the Metalworking Business Index—Gardner Publications’ monthly survey that reports economic data trends in the metalworking industry (www.gardnerweb.com/mbi), business activity for durable goods manufacturing continued to expand through October. In response to the harsh news in the financial industry at that time, though, all sub-indices of the survey have since contracted. With significant drops in new orders and backlog, the outlook might at first be daunting. But with material prices particularly low and exports nearly unchanged, the industry should effectively withstand the slow times.
To help alleviate fears, we need to remember that economic trends are cyclical. An example is reflected in the stock market, which is down, on average, one year out of every three. In order to see growth, we need to take the bad times with the good, knowing full well that things will get better. The key to riding out the low points is to always be smart about spending. In business, this means being prepared to invest in capital equipment when demand is low and looking to win as many customers as possible when other companies are struggling to make ends meet. Regarding investing, Warren Buffet once said that we should be greedy when others are fearful and fearful when others are greedy. Now is an ideal time to take advantage of opportunities that lie before us.