Let’s make a bold prediction. You will start seeing this keyword “cash is king” mentioned over and over and over again for the next couple of months, if not years.
I believe the economy will be turning down mainly due to what’s happening in the US and around the world. Don’t give me credit for saying this, if you have been following since last year (2007) since the fall of the subprime crisis, you’ve probably knew what’s coming.
Why will it be that case? In a tough economy, raising equity and betting on that returns will outpace debt and interests payments gets harder. Those who have cash and assets and willing to take calculated risks will be the ones who will benefit in this kind of situation since they can get cheaper deals their way. If you have cash, every assets looks cheaper.
In a time like this, it’s also true to say that:
Only the brave will buy
Or maybe we should learn from Warren Buffet as he famously mentioned the following quote:
Be fearful when others are greedy and greedy when others are fearful
Tell me, are you the brave one?