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04.07.16

Making a Packet Out of a Crisis

Whatever your politics, you’ve probably noticed there’s a little bit of an economic hiccup happening in good old Great Britain right now.

Whether or not the forecasts for the coming future brighten up, in a dispassionate manner this chaos represents a good time for entrepreneurs and those with the right skills to capitalise on risk.

Yes, we’re talking about Brexit and the ensuing fiscal chaos it has created. Now at a time like this, we could sit around waxing lyrical about the reasons. Such as why a parachute, if not a plan, is ideal if you’re going to launch yourself off a cliff into the unknown.

But perhaps it’s better to jump in and take advantage with a little old fashioned speculation. Warren Buffet, one of the great entrepreneurs of our time made the famous quote “when others are fearful, be greedy, and when others are greedy, be fearful”. Can this maxim be applied in these moments?

Ultimately money can only be made when someone is either forced to buy something for an artificially high price, or to sell something for an artificially low price. Due to the competitive nature of the markets, this is a rare occurrence. Except for the case where the market is literally falling over itself, choking on its own uncertainty.

And like it or not, that’s the situation that we’re finding ourselves in right now. Some might argue that the panic is fuelling the uncertainty and we all just need to have a couple of cups of English Breakfast and return to the buttered toast whilst leaving the broadsheets on the side. However, most would say that the worst of the sickness is still to come.

Let’s look at the situation in real terms. Brexit has definitely made a couple of things happen already. The pound has dropped in value against its foreign rivals and the banks are odds on to make borrowing a whole lot more difficult in the coming months.

So with interest rates on the climb, fuelled by uncertainty, people will be forced to cash in their assets to carry on in the lifestyle they’ve been accustomed to, in a best case scenario.

In a worst case scenario, that guy who’s been hanging on to the brink since 2008 and should have really gone the way of the dodo in the crunch, will finally fall prey to the sharks that have been lured by the blood that’s been a long-time floating in our waters.

Therefore there’s going to be some pretty exciting property and businesses coming onto the market in the coming months. Sidle up close to your insolvency practitioner friends and estate agents, as you never know what kind of bargains these individuals might be able to put your way.

And be prepared to make money on both sides of the fence. There’s going to be a whole load of people in the EU and US who’re going to be overjoyed that their currency is now worth 10-15% extra value than a couple of weeks ago. With literally more bang for their buck waiting for such investors on these shores, there is definitely the scope for a few golden handshakes.

By hitching up with the right people, they provide the collateral whilst you lend them your local knowledge, expertise and investing abilities, giving you both a chance to prosper and profit during these difficult times. Of course, some kind of track record in this field is probably necessary, but those in the know will become very attractive partners for the out of town speculator.

Of course, the key is that if something is too good to be true, then it always is. This is not a time to whoop off into the sunset riding on the back of a barely examined accounting record or order book, or a poorly surveyed property. Make sure you do the diligence and keep a very keen eye on the seller, as you never know what a desperate man might do.

And remember, at all times, but especially times when the mere mortals amongst us are shaking at the knees, then fortunate truly does favour those gods who have it in them to be bold.

T: +44 20 7486 1717
E: emma@blissinvestment.partners

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