Contents:-
Introduction .
Meaning and definition.
Reasons.
Impact.
Strategies.
7 points.
Introduction
Recession is the result of reduction in the demand
of products in the global market.
Reduction in GDP.
The major 3 recession periods are:-
1985
1990-1993
1998
2001-2002
2008
“recession is the real killer not the terrorists”
Meaning
a complete reverse growth
of an economy
Definition
National Bureau of Economic
Research NBER says so. There
definition is:
"Negative Economic
Growth for two consecutive quarters".
This means there must be a fall in real
output for a period of 6 months”
Reasons for recession:-
Loans and crediting
NINJA (No Income No Job No Assets)
Fail to repaying loans.
Impact of recession:-
Savings.
Investment.
Consumption.
Aggregate demand.
Un employment.
Government barrowing.
Falling share price.
Falling investment.
Strategies for global recession:-
Promoting your product and/or service's value in
a recession.
Better utilize your resources.
Deliver more value to customers .
Creative partnerships with other struggling companies.
Establish better ways to collaborate.
Keep It Simple Sweetheart (KISS) .
Putting It All Together .
7 point plan to get for the next recession
According to Gluskin Sheff’s David Rosenberg.
1) “High-quality corporates” plus companies with “A-type” balance
sheets and “BB-like yields.”
2) Reliable dividend paying Stocks (including preferreds).
3) Low debt-to-equity ratios, high liquid asset ratios, good balance sheets,
no heavy debt.
4) Hard assets: Oil and gas royalties, REITs – focus on income stream.
5) Sectors / companies with “low fixed costs, high variable costs, high
barriers to entry/some sort of oligopolistic features, a relatively high level of
demand inelasticity.” This includes utilities, consumer staples + health care.
6) Alternative assets that do not rely on “rising equity markets” or are
independent of volatility trades.
7) Precious metals. Specifically, he puts a $3,000 target on Gold.