Michael Wurzer As I was coming home from the Clareity conference last Friday, I was struck by how many people there were in the airport given the travails heard daily in the news about the economy. Living in Fargo, it’s hard to see the impacts of the economic hardships across the country. Also, I hear rumblings about the real estate sector possibly finding bottom and even making an upturn. Yet, the news from the stock market just seems to get worse every week. So, what gives?
This piece in the NY TImes speculates about something I’ve been thinking lately, too, namely that many of the businesses closing and laying people off are using this “calamity” as an opportunity to shutter businesses that could or should have been shut long ago. Circuit City. It was walking dead. In contrast, Amazon is just gearing up.
There’s a tectonic shift occurring in the economy but its been building for many years or decades. The shift is being revealed by the financial fiasco, but that isn’t the ultimate cause. The upshot of this, from my limited vantage point, is that the economy isn’t ruined but just transitioning. Some people in some markets will suffer, no doubt. Others will prosper.
If this view is correct, there are a lot of opportunities out there. The entire economy has been battered over the last twelve months. Some of the stocks and other investments are being crushed along with the rest, and that probably is not representative of the fundamentals. Of course, self-fulfilling prophecies are real. We can think ourselves into a malaise and depression. Or it all may be so much worse than is apparent from my privileged perspective.
What do you think? Are there undervalued assets out there right now? How about real estate? Do you think the end is in sight or are we just seeing the beginning downturn?