Business in Booms and Busts

A Question for Michael Masterson: “Are you approaching business any differently in today’s economic climate? Baby boomers never experienced a severe depression or hyperinflation –therefore, I think their worldview of business is skewed.”


Plano, TX

Michael’s Answer: Yes, D.M., I am approaching business differently these days.

I am working harder than I’ve worked in several years. And I’m expecting everyone who works with me to do the same.

I’ve been through downturns before. And I’ve survived by putting my head down and moving forward. That’s what I’m recommending to my employees and my clients. Stop your unprofitable activities. Get rid of marginal products and people. Get mean and lean — and keep doing what you do best.

For me, that means focusing on small businesses in certain information-publishing industries. I like natural health and anything related to baby boomers. That has worked well for me for the past 30 years, and I expect it will work well for another 20.

I believe The Great Recession is still going strong. Lots of businesses will go bankrupt in the next several years. Millions of workers will lose their jobs. The U.S. will struggle and fall. It will no longer be the world’s best economy. But we will survive. And those who make the right moves now will become very rich.

I am investing carefully in real estate. I intend to buy one or two dozen rental houses in the next year or two. When the prices of these properties get back to where they should be, I’ll have made millions. In the meantime, they will generate tens of thousands of dollars of income for me — above and beyond my expenses.

I am buying precious metals, too. But I’m spreading my bets around, because I expect that gold might correct itself a few times before it returns to new highs in a year or so.

I’m also investing in a select group of high-quality, dividend-paying stocks. But there again, I’m expecting a significant market correction. And I continue to invest in bonds. They are riskier than they were before, so I’m being cautious.

Generally, I see the next few years as a buying opportunity for all sorts of investments. I’m bullish on smart investing, even though I think the economy is in serious trouble.

[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]