Oh, The Times They Are A Changing

It seems that everything is changing fast these days. Just a year ago all my friends and business partners were riding high on the economic boom taking place. My phone was ringing off the hook for my construction business and my wife was showing homes left and right. Everywhere I looked I saw 20-somethings driving brand new, loaded 4X4's with tool boxes in the back and a business sign on the door. There was a confidence and enthusiasm in the air wherever I went. "Let's do lunch," and "I'll buy," was common lingo.

Here we are a year later and that enthusiasm has turned frantic, as many of my acquaintances, friends and the nation try to figure out how to generate some business, make a sale, make the truck payments and the mortgage. Phones which brought business like mana from heaven now carry calls from collection agencies demanding restitution for our play first, pay later lifestyles. Yes, the bubble has burst, and the smattering it's left on our communities is leaving long stains on stressed-out, unhappy faces.

The challenge for most people is that they haven't been taught how to analyze trends and cycles and therefore, get caught with their pants down when things turn. Too many people take their advice from t.v. and build their financial plan based on that information. I too have been guilty of getting high on the media-ether, moving on the wrong deal at the wrong time and losing my shirt at the shift.

One of the things that a mentor told me a few years ago is that once something hits the news or the business magazines, it's too late. The real money has been made and the risk factor has been increased as sophisticated investors head to the next, not yet public, trend.

A simple illustration I was shown sheds a little light onto what I'm talking about. If you look up real estate trends in this country you'll see that home prices, on average, double every ten years with highs and lows throughout. Sometimes it's a hot market, (like what we just left), and sometimes it crashes, like what were in now, all the while doubling in price every 10 years.

If you chart the rise and fall of home prices from hot market to cold market you see something that looks like mountains and valleys. Top of the market, top of the mountain. Bottom of the market, down in the valley. Now notice that when real estate is high, gold and oil are typically low. When real estate is low, gold and oil are high. Look at the current market. What has real estate done recently and what has gold and oil done? Real estate is in the tank for the most part and gold and oil are through the roof.

That's an obvious illustration of recent trends of how investors move money around and change markets. Does that mean it's time to buy gold and oil? Not in my opinion, but i'm not a financial planner and don't give advice. Gold and oil are higher than they've been in years. You could speculate that they will go higher and they might, but just go back to the novice system of buy low and sell high and you might have your answer.

If a person listens to what most people have to say about getting rich the chances are they will get what most people get. Broke. Look around. Most people are not doing so well right now. On the flipside, there are a minority who are doing exceptionally well, right now, in this market. They see this market and every market as an opportunity to win. These folks see t.v. as a tool and use it as an indicator and do exactly the opposite of what the masses are doing knowing that the masses will listen to what they see on the tube. When a select few know where the masses are going next and position themselves in front of those people, fortunes are made.

It's just like the baby boomers. They are the masses of epic proportion. More people born in the shortest period of time in history. They created titans out of tiny companies and fortunes for many as that mass of people grew up and bought baby food, (Gerber). Cars, ('65 Mustang). Homes, (Suburbs) and fast food, McDonalds.

The point of this is simple. Learn to read trends and know that history repeats itself. Do the exact opposite of what the masses are doing, buying and investing in. And be prepared and positioned in front of them, offering a service and filling a need, when they rush toward the next trend where you are already educated and prepared, to meet them.

It's simple, not necessarily easy, but entirely worth it.