I’m generally a Mark Cuban fan, and he illustrated a point I’ve been thinking about lately with this blog post about the “new normal”.
I’m not smart enough to know exactly how things will look in 10 years, but I’d be willing to bet that the rate of change has accelerated beyond any other 10 year period in recent history. I agree with Cuban that what happened in the financial markets over the last month can’t be analyzed in terms of historical norms. “Normal” just fell off a cliff with the Dow.
Warren Buffett is as likely as anyone else to know what is going on, and he’s buying. However, even Buffett would tell you he doesn’t have a crystal ball.
There will be innovators who will correctly predict how the dominoes fall as a result of the current financial environment, and they will make a fortune. This is a huge opportunity for anyone who has patiently, consistently stayed on top of their industry waiting for a reshuffling of the pecking order. I’m paying my respects in advance for their ingenuity.
However, most of us (me included) are probably too stunned to know what to do and will by default do nothing. We’ll stuff cash in our mattresses and wait for some indication of where things are going. I’m not being critical, nobody can be an expert at everything, and turning the current crisis into an opportunity will take a decent amount of luck in addition to quick thinking. But my hat’s off to those who innovate their way out of 2008, and correctly predict the future by creating it.
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