“We have a rainstorm due. It didn’t come last year. It could come this year. It could come next year. But, it’s coming.”- Phil Town
This week Phil and Danielle discuss prepping for the next recession. Seth Klarman published a paper to his investors that is a little scary. It basically takes a grim position on the economy and where we’re at. We’re at the end of a long credit cycle with a ton of debt, there’s the potential of recession, potential depression, potential wars, potential riots. A lot of really unpleasant things can happen at the end of a credit cycle when you simply have too much debt worldwide.
We also talk about why Phil doesn’t think it doesn’t hurt to be in cash for 3 years if you’re in cash when it all hits the fan and you can take advantage of that. The goal is to have capital available to invest when everybody else thinks it’s the end of the world. Rule #1 investors want to invest want to invest in 1932 after the depression hit. We don’t want to invest in 1999 during the dotcom boom. We don’t want to invest in 2007. We want to buy fear and sell greed.
If you want to learn more about how to prep for recession, join us on the podcast today!
Books to Read From This Episode
- Margin of Safety by Seth Klarman
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