Gold 401K

The Current Stock Market Meltdown

All over Europe during the early 17th century, it was reported that Tulips-bulbs (from which the flower is grown) became staggeringly popular with investors, to the point at which they were worth more than gold by weight.

Everybody with any disposable income seemed to jump on the bandwagon because they could make some “easy money” (clearly an oxymoron if ever I heard one) simply by buying a Tulip-bulb and then selling it to another “investor: a few days later, because the price was rising so rapidly.  Years later this became known as Tulip Mania (or Tulipomania).

In 1929, a similar thing happened with shares of companies (stocks) when even hotel bell-hops were often reported as being the tipsters of their day, giving hotel-guests “hot tips” for stock purchases, based on what they’d heard so-called “big-investors” talking about in the hotel.

I should note here an old expression that goes something like this: and I paraphrase “when you are getting stock-tips from a bell-boy, it’s time to get OUT of the market altogether!”.

What happened across the world starting around 1985 was Tulip-mania all over again.  This time it lasted for about 25 years. Investors and speculators having this ridiculous notion that stocks (or Tulips) can only EVER go up in value.

We are seeing the results of this “mania” beginning in late 2008.

Fish

Have you ever seen a school of fish being hunted?  I have, because I like to scuba-dive.  Depending on what is hunting them (different aquatic creatures have different hunting styles), the school of fish APPEARS to react simultaneously as a GROUP.

It LOOKS like they all move at exactly the same time, away from the source of the attack.  What ACTUALLY happens is quite different.  If you look closely, (or watch a video of the event in slow-motion) you’ll see that ONE fish always reacts first.  This is rapidly followed by another one or two, then another two or four, then another four or eight………..well, you get the idea.

Investors Are Like Fish

Frighteningly, stock-market investors are very much like fish.  When ONE sees danger ahead (this is usually the clever one or the one with insider information), he (or she) will react by selling stocks.  If he’s a big-enough fish in the sea of investors, others will watch him and then follow the same course of action; he’ll sell too.  Guess what happens next?  Yep, all the others start to sell too, which, in turn, drives the price of stocks down……………..and down…………….and down.  The laws of supply and demand will ALWAYS apply.  If there’s less demand for something, the price will drop, because people aren’t willing to pay as much.

Did ALL Businesses Suffer During The Great Depression?

Absolutely not!  Many businesses THRIVED during this time.  Businesses like:

Repair shops (all kinds, including automobile repairs, home repairs, bicycle repairs etc.)

Healthcare services

Public Transportation

Second Hand (thrift) stores

Legal Services

Trucking and Freight Services

And………………………………….Educational Services.

Why Education Providers?

Why did Education become such a successful business to be in?  Because young men (who in that day were typically the bread-winner) realized that they HAD to go back to some kind of school, so that they could learn a new trade or other new skills.  They knew that they had to adapt to the new way of the world.  So they either educated themselves or they found somebody who would do it for them.

What The Successful People Had In Common

The successful companies and the people who ran them saw the depression as an opportunity.  There are many good examples of this, not least the Battle of the Cereals.  C. W. Post was the leading brand at the time, but Kellogg chiefs chose to increase its advertising budget while the people in charge of C.W. Post decided to cut-back to “save money”.  The result was that Kellogg became the number one brand of cereal manufacturer in the U.S. which it still holds today, 80 year later!

Companies like Kellogg not only survived the Great Depression, they prospered during it.  They didn’t wait for public demand to come back for their products, they actively (that is ACTIVELY) created demand for their products.

And when the great depression was coming to an end and spending picked-up due to increased employment across the country, these companies continued to grow because they had created a loyal following of buying customers during the bad economic times of the previous years.

They changed; they adapted; they studied; they learned; they SURVIVED and they PROSPERED.

YOU can survive this current Great (Greater?) Depression.  It’s up to you.  It IS a decision you CAN make.  Just wishing it will make no difference to you or your family’s survival.  You have to take ACTION.

Action is the KEY to your survival and prosperity.  You must change, adapt, study and learn.

Change your thinking.

Adapt to your new environment.

Study ways to make money.

Learn new skills that will earn you money.

About the Author

Learn how YOU can make money online at http://www.ballisticbloggingforcash.com

And, for more ideas on how to make money on the internet, get a FREE copy of the book ‘Fire Your Boss’ at http://www.lukehawthorne.com

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Weekend Update Technical Analysis Video.avi