Learning from the sub-prime and dot com busts
February 25, 2008 by jim
What can you learn as a business person and or investor from the sub-prime mortgage bust and other bubbles? Seems obvious, but if your in a boom there will be a bust. Prepare for it. Just as the old stock market saying says “No tree grows to the sky”; no boom last forever.
How do you prepare? Look for the signs of the bust. They happen as the boom becomes for frantic. Look for the bad news early.
Some people say it is important to have people around you who will tell you bad news. That’s a great idea with an exception; if the bad news puts them out of a very nice job. If you want to have your people tell you bad news then you better have a way to keep them employed at least or reward them at best.
Small business bottom line: expect a bust in a boom and keep your own ear to the ground for the signs of a bust.