Recession, risk or opportunity.

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May 23, 2022

by a searcher from EGADE Business School - Tecnológico de Monterrey in Monterrey, N.L., México

To last dates the alarms for a recession have been turned on. It is very likely to happen. Shall we stop our searches? Some experts recommend "Think long term and follow an investment plan" considering objectives and time horizons but taking into account the risks. It's about keeping in mind what's coming and preparing. There are experts who remind us that "Noah didn't wait for the rain to start before he built his ark." It's more about having a plan before a recession and maybe you can take advantage of it. Just consider it. My best greetings.

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commentor profile
Reply by an intermediary
from University of Memphis in 5000 Linbar Dr, Nashville, TN 37211, USA
Material changes in economic factors should always be one of your diligence items. You can do it by the broad served market and the specific business you are evaluating. While multiples may come down, the corresponding increase in interest rates will decrease buying power, so sitting on the sideline makes little sense from a straight investment standpoint. Good deals will always be out there and there is no way to predict how owners will respond to a possible downturn, but the current economic concerns should encourage owners to accelerate their consideration of selling.
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Reply by an intermediary
from Royal Melbourne Institute of Technology in Sydney NSW, Australia
There is no either/or scenario. Risk and opportunity are flip sides of the same coin. One does not exist without the other. Our role (collectively as business people) is to determine whether our skills and resources can be put to use to leverage and manage that risk in a way that drives an advantage for us (and out stakeholders). So I would keep an eye out for points of change, as someone else's drama could be your gold mine.
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