People keep asking me if I think we are headed for another credit crisis and recession.
Of course it is impossible to know, but the fact people are asking the question tells you something.
Famously, Joseph Kennedy is said to have gotten out of the stock market right ahead of the 1929 market crash, after receiving stock tips from a shoe-shine boy…
Today, with the obvious setup of easy credit that led to the last credit crisis, we might be in an equally precarious position…
Or we might not be…
Again, while most everyone on Wall Street likes to take an educated guess, it is unknowable.
But irrespective of where the market is headed there is one thing you can know with absolute certainty.
You cannot control the economy and the markets, but you can always control how prepared you are to respond to change.
When the Internet bubble burst when I was based in Silicon Valley in 2000, of the many people who lost their jobs, it was those who were thinking ahead that got back to work quickly.
Many others remained unemployed for months, if not years.
The same was true after the last credit bubble burst.
By the time almost all of my former Goldman leveraged finance colleagues were being laid-off I was well-positioned in a distressed investing seat at Carlyle, taking advantage of the market collapse…
That was only possible because I had been thinking ahead and left Goldman some two years earlier.
I wasn’t able to do that because I knew the direction of the market, but because I had taken control of the direction of my career.
In the next downturn, what will you do?
At the least, are you prepared to respond to change? Or even better, are you positioned to take advantage of opportunity?
Either way, you want a plan.