Big Opportunities after the Bubbles Pop: Cashing in on Distressed Assets
In nearly every industry in all three sectors of the economy, there will be many opportunities to benefit from falling asset values. Just as high-priced office furniture from bankrupt dot-com companies ended up at auction sales for pennies on the dollar after the relatively small Internet bubble popped, there will be countless auctions of every description all over the planet after the biggest bubble crash the world has ever seen. Opportunities to make large profits by buying and servicing distressed businesses and other assets will actually become one of the good sectors in our postbubble economy.
As always, timing will be key. One of the biggest mistakes many people will make is buying distressed businesses or other assets too soon. In this very unusual economic downturn, involving the fall of multiple bubbles, we will face very high interest and inflation rates that will take a lot longer to come down than anyone might imagine. It will be easy to mistakenly think the worst has passed and the time is right to start buying up distressed businesses and assets, when actually the price of these bargain properties will likely fall even lower. For maximum profits, think years, not months. Many people in the real estate market are making this mistake right now. They think that because an asset has lost 25 to 50 percent of its peak value, it is a bargain. It emphatically is not!
That said, there can be shorter-term ...