There is an old saying that always comes up in uncertain times and that is “what is the definition of stupidity? Doing the exact same thing over and over again hoping for a different result”. We must all face facts, the game has changed and the landscape has forever been altered. It is not just the US economy but complex layers intertwined in the global economy. Some companies get it and some companies fail to see that and are uselessly hoping for a different result. A perfect example came out today from Caterpillar Corp. (NYSE - CAT).
They said that effective for 2009 they were cutting executive compensation by 50%. Now that is thinking completely outside of the box. Caterpillar will be a survivor because of that type of thinking. On the other side of the coin you have the Big 3 automakers with their arcane structure that is literally still being controlled by the UAW. Why is it that foreign auto companies can come here build plants, produce cars and make money? The two main reasons are NO unions and innovation. GM, Chrysler and Ford still don’t get it. If the government bureaucracy is telling them that and they don’t get it then they are in for a world of hurt.
Getting back to my heading on this article is that you learn every day. If you close your mind ala the Big 3 automakers you are literally taking the path to failure. A good example of this is something that happened to me recently. I have taken Kenpo karate for many years earning my black belt and understanding the discipline that it takes to accomplish that task. In a recent conversation with my Instructor, Dennis Brookman Zombie Strippers! psp
, he was asking me about the capital markets, stock values and how all of this turmoil happened. Through our conversations about valuations of companies, efficient markets
, global domino effect, etc… I realized that I was actually gleaning a very unique perspective from someone who in his own right was a master of his own art. Now my instructor can kick my can all around the dojo in a very efficient manner but he also said to me that he is always learning even from relative novices such as myself. I never really believed him until we had our recent discussions and as we talked it got my brain thinking about this whole economic disconnect from a completely new perspective.
These uncertain times will provide for extraordinary opportunities for financial gain. According to Alan Greenspan, this is a once in a lifetime event Valley of the Dolls full Cloak & Dagger release
. You can look at that like everyone else in the industry and just hope to survive or you can look at it from the perspective of the valuations will never be this low in our lifetimes. There are some tremendous values out in the marketplace and I will be looking at building a long term model portfolio with a major caveat and that is to never close my mind.
Happy Holidays
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