By Paul Adams
I’ve been looking for some good news, lately. The eternal optimist that I am, I always try to find the silver lining. And I think I found some.
It’s not all bad news, after all. Take a look at Netflix. Their stock is on steroids. Netflix is sending us a clear message: good times or bad, people will still watch a movie cocooned in the comfort of their home. That should come as great news to anyone associated with the movie industry. You are at the right place, at the right time. And if you are thinking of investing in a movie with A-list actors, Hollywood is wide open for business.
There is a nursing shortage. Baby boomers are starting to feel their first aches and pains and the extra TLC they so desperately require is not there. They will soon be needing medications, lots of them. So if you’re thinking about nursing or getting involved in companies that cater to an aging population… opportunities abound.
There is the worry that GM may go underwater. Where’s the silver lining there? Well, what about re-tooling plants to produce water-powered and electric-powered vehicles? Sure, we will still need oil for our plastics industry and muscle cars (for those of us who can fuel our cars at any price). But reduce the size of the clamor over oil and you reduce regional conflicts. What a novel idea. That’s a silver lining to a geopolitical hot potato.
It gets better. In some parts of the country banks are selling foreclosed homes at rock-bottom prices. That strategy may require a five to ten year hold until the next prosperity cycle kicks-in, an eternity for some. but think about it. If we are not buying our own real estate, foreigners are. Chinese investors known for their discriminating good tastes and patience are arriving in droves to grab a piece of America. In contrast to our own myopic, gotta-have-it-now, flip-it-or-dump-it mentality, they maintain that all good things come to those who wait. Perhaps, they hold more tenaciously to the neo-confucian belief that Bulls get, Bears get, and Pigs get slaughtered (except, perhaps, in the Year of the Pig).
Still more good news. The Obama administration finally stepped in to stop the hemorrhaging on main street with the aptly named “Making Home Affordable” initiative. Essentially, it provides home owners (who can prove financial hardship) a reprieve by lowering the interest rate, and in some cases, even the principal amount of their loan. Homes with property values of over $729,750 do not qualify. The program lasts until 2012, and applies only to loans made prior to Jan. 1, 2009. That means that 4 million homeowners who would have otherwise faced foreclosure can now keep their homes. The program detoxifies the toxic loans in the system and theoretically creates a bottom for the housing market. You can almost see the light at the end of the tunnel. It won’t be long before the foreclosure pandemic will be stemmed, and it’s business as usual. And so, we must ask ourselves: is it pure coincidence that the Chinese are investing in America?
What about investments, you ask? Some people prefer trading the market index instead of individual stocks. If you prefer trading market indeces, just remember: the market responds to news. Are you expecting more good news over the interim or more bad news? Carefully assess your tolerance for risk with any investment.
If you have been looking for diversification and movies, the stock market, or real estate is not exactly your cup of tea, there is always FOREX, a $3 trillion currency market that trades 24/7 with unlimited market access, no restrictions on short selling, low capital requirements, and no commissions. Not without its risks, but it beats the slot machines hands down. Automated and semi-automated trading programs, also known as Expert Advisers, allow you to trade like the banks. Find the right trading program and you could turn your PC into a virtual gold mine.
Speaking of gold, the prudent have always held gold in reserve as a hedge against the prospects of war, inflation, or a market downturn. Silver coins are also recommended for the very same reason. Gold may hit $2,000, as some pundits expect, but even if it doesn’t, it’s great insurance. An ounce of silver will run you roughly the price of three double cappuccinos. As precious as gold, is food. In uncertain times, a year’s supply of food will let you sleep more peacefully at night. The good news is that these commodities are still plentiful, and once you have your house in order and fear is replaced with calm you can devote your energies to more creative pursuits.
A final piece of extraordinarily good news. One principle still remains. Immutable, irrevocable, and timeless, by all accounts, it holds perhaps the best promise for a moral and economic recovery. It’s the benefactor principle. Habitually contributing to a good cause by stepping outside of one’s comfort zone to serve those in need may seem like an exercise in futility to some. It is this very principle which creates opportunities, which in turn transmute to prosperity, and that is a silver lining indeed.
