NEW: Michael Phillips
Wednesday, January 30, 2008/
To all the Gen-Y flock of investors out there running for the hills, just remember; we learn the most from mistakes, not easy victories.
Bulls, bears and Bernanke
I’ve been having heated dinner debates and water cooler conversations for the past two years about how asset prices are inflated and people are “dreaming” if they think the rises can continue. More importantly, the most baffling thing has been how people have afforded to do all these things.
It turns out we’re all leveraged to the hilt and some “low-doc” back of a serviette loan contracts have gone belly up in America, which has resulted in global markets haemorrhaging. The saying goes “when America sneezes we get a cold” but it looks more like the Yanks have fallen off a building and landed on us.
So finally after two years of tantrums I can drink that tasty cup of “I told you so” and go on to my next drink; “let’s hunt for bargains”. We’ve finally seen that what goes up does come down and young investors have found out that the markets are not just full of bulls; there are these pesky animals called bears out there as well.
The thing that amazes me the most is that we are meant to be getting to an age where we are so well informed and practical in our actions, but we haven’t changed. We’ve got all the information in the world, we just don’t know what to do with it. We are all still a big flock of sheep that runs for the hills when we hear a tremor and frolic happily when everything is perceived to be rosy.
The last few weeks of pain are particularly interesting for the greediest bunch of sheep, Gen-Y. This particular flock are meant to be the kings and queens of easy money, less work hours and higher demands. Gen-Yers have never heard of a thing called “recession” let alone a decline in the financial markets of 20%!
I read with interest an article last week about how Gen-Y investors were logging on to their internet investing chat rooms and whinging about watching their money “vanish before our eyes”. Well, sorry guys, no sympathy here. You’ve just had the most important investing lesson you’ll ever get. It’s not about easy money and it should never be. Whether it’s work, investing or any endeavour you undertake, nothing will beat hard work and patience.
So to all the Gen-Y flock out there currently running for the hills, just remember, it will get sunny again some time; but we learn the most from mistakes, not easy victories.
In the interests of full disclosure, I should add that I’m no different to any other sheep out there. I lost money last week in the blink of an eye and held back the tears at my desk. The funny thing is though, I didn’t actually “lose” money because I didn’t sell. That’s one thing we mustn’t forget as “investors”. Assets go up and down, but if you are in good quality ones for the long term, odds are you will be fine. It won’t be easy money, but it will be smart.
Michael Phillips is a 29-year old CPA managing a business full of Gen-Ys. He’s the Commercial Manager of Cremorne Group which wholesales and retail mens and womens apparel, including the Tommy Hilfiger, Blazer and Perri Cutten brands. He offers his experience as a pioneering Gen-Y managing Gen-Ys, covering issues such as how to recruit, retain and get the most out of Gen-Y – the notoriously difficult younger generation of employees aged 15 to 30.
For more Manageing Gen-Y blogs, click here.