Forget about crystal balls
Estimated Reading Time: About 3 minutes
These days everywhere you look people are talking about a recession. Twitter threads are offering tips on how to recession proof your business. Random Redditors are claiming spending habits are declining and that indicates an impending recession.
It all depends on where you look.
This graph of Private Equity transactions shows a definite high in the last few months of 2021. But at that point we were at the lowest interest rates of all time and inflation was through the roof.
Source: Pitchbook Data
The data shows a definitive dip from 2021 to 2022, but honestly the last 3 quarters of 2023 have seen a steady rise as far as value. With Q2 coming to a close it will be interesting to see if that trend continues.
Then let’s take a look at home prices. There’s the obvious decline in 2008, and then the huge run up of 2020. As interest rates rose in 2022 there was a small decline, but nowhere near what we saw in 2008.
An interesting set of data from Freddie Mac shows interest rates at an all time low coinciding with an all time high in private equity deal flow(compare Q4 2021 across both charts).
Source: Freddi Mac
What is going to happen for the rest of 2023?
Things have been a little sketchy for the past 12 months.
War in Eastern Europe? That definitely didn’t help.
Banks failing like it’s The Great Depression
At the end of the day no one has a crystal ball. No one knows exactly what is going to happen in these uncertain times. Choosing a particular investment or strategy because you think you know what is going to happen is a very risky game to play.
Here are two principles we recommend to every non-tech entrepreneur.
Work
Work is the cure for a lot of things. Working hard gives you a clear advantage over the rest of society.
"Work is an antidote for anxiety, an ointment for sorrow, and a doorway to possibility." -Dieter Uchtdorf
Learn
It’s always a good time to learn something new. Even in non-tech businesses we should learn how to embrace technological changes. Always be looking for opportunities to learn something new.
“Education is expensive, but learning is cheap.” -Naval Ravikant
2020-2021 was a great time to build wealth. Selling houses, buying Bitcoin, viral social media apps that took off because everyone was at home, and even crazy Netflix series’ about tigers and chess.
But no one could have predicted all those crazy things that happened. Those who profited got very lucky.
“Luck Is What Happens When Preparation Meets Opportunity". - Seneca
Now go out there and make some of your own luck.
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