The only thing we have to fear it’s fear itself

President Roosevelt said that phrase back in the 1930’s when the a big recession was happening. I just read this article on Mashable where Mark Hopkins quotes Steven Hodson saying that we still can get up, even if we don’t learn from our past mistakes in past recessions.

The truth is that economy isn’t perfect and capitalism isn’t perfect either. Capitalism is the best system we know and for sure the one we must use, but we need to tweak it on the go for it to achieve it’s main goal: Bring wellbeing to all the human beings living under that system. But there is one thing we haven’t tweaked since the first recession occured some centuries ago: To take control of our emotions.

At this times when i see Wallstreet indexes fell down every day, when i think the Dow Jones should be renamed Down Jones, when all the main markets in the world plunge i ask myself how many of those points that the Dow Jones went down are of true value and how many are generated by massive fear. Many financial advisors (and i must confess that i’ve read the books, but not payed attention to the authors names) have always recommended to control fear when things like this happen, but we fail to do it.

Daniel Goleman and the numerous books about emotional intelligence try to teach us how our emotions work and how we can control them. Right this is a skill we all need to develop before getting into feeling fear that will only make things seem worse than they truly are. The first thing we need to do is sit and relax, then put some music that makes us happy and start analyzing the situation thinking that every business that is in the stock market has people inside, and this persons are capable of generating revenues that is what ultimately affects share prices. For example, Yahoo Inc. is a great company, they managed to build a wide user base around the world and add some amazing services to their portfolio (Flickr to name one of those).

Yahoo stock went down quite a lot this week and i wonder how many people have sitted down and analyzed the capabailities of Yahoo before actually starting to sell and push the prices down. Yahoo in my POV is a very capable company, they can in fact build a big social network based on the wide range of users they have using individual services like Yahoo! Sports, Yahoo Mail, Flickr, etc. They can also stop focusing on Ad generated revenue and start to offer services that people can use and leave the ads to the ad expert Google. I don’t think Yahoo is worth the price that it has right now (Disclaimer: This is not a recommendation or expert advice it’s just my opinion and though i know about finances I’m nowhere near an expert).

On the other hand we have many start ups that are being affected by this plunge as they see capital flyaway from them and sales projections being lower than they expected. The main problem i see here is that many Web Startups are not focusing to the global markets. While the US could be on a recession countries like China, India and Peru are growing at rates of over 7% anually. These markets are also potential costumers and everybody knows that a diversified userbase will always be a coverage to the risk of a recession in one country. I liked the message posted by Jay Adelson saying they got money to expand their operations abroad and to more markets, that’s a good way to go for Digg. I think that their international expansion will make them bigger and i hope they get a version in Spanish and German wich may blow it up both in Latin America (Including all the Latin People in the US) and in the European Silicon Valley (Germany).

So, as you see by this few examples things aren’t lost yet. Comapnies have capabilities inside that will make them work and get out of the recession just fine. The people that let themselves be controlled by fear will leave a opportunity for those who think more calmly, buy stocks or purchase full businesses to make lot’s of profits in the future and to rebuild the american economy. Warren Buffet buys every time something like this happens and he has became one of the richest guys in the world just with stock trading (which mainly is taking advantage of others people fear).

So the recession is here and companies will be affected, yes. But we need to start getting out or creativity and look at ways to overcome it. See my post Start me up where i explain how Calley Nye is looking for funds for her startup in a new way. The world is filled with creative and capable minds so we should not worry about it. Just remember: DON’T LET COLLECTIVE FEAR CONTROL YOU.


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