Those of us who have trudged the stock market rings of yesteryear sense changes already. We used to get thrills by guessing stock price trends in the U.S. from developments in Japan. Now, this has become common knowledge. Dealing in other countries and currencies is as easy as trading in ADRs on the NYSE or NASDAQ. No BRIC country mattered until the 1990s.
A new U.S. administration in 2009 could bring revolutionary changes. The communists of China have shown an unexpected appetite for business. India is almost a new country in economic terms. New sectors have sprung up in California, even as dark clouds gather in Detroit. Are you ready for the stock market of tomorrow?
Three specific steps can strengthen your armory for investment battles of the future.
1. Add new skills to your kitty. Learn a language if you are a financial authority. Spend time abroad if your experience is limited to a home territory. Enrich your investment club with a member who is strong in areas of your weaknesses. Go back to school with an online course.
2. Develop new information sources. It is not enough to look at historic financial statements. Prefer discounted cash flow analysis. Do not risk capital on point estimates. Ask for assumptions, scenarios, and sensitivities instead. Stock brokers may appreciate their own commissions more than the business advice on offer. Use the Delphi Technique for forecasts from domain experts instead.
3. Understand national and world linkages between business and politics. Learn to ferret out motivations of global leaders for their positions on industries. Know what war and peace means for business. Figure out why Zimbabwe and North Korea are so sanctioned, even as the perpetrators of the Tiannemen tragedy are courted and feted.
The stock market will not wait. Every day after today counts. Hop on to the profitable stock market highway for a ride of the millennium.
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