Recession Investing Quotes

Only when the tide goes out do you discover who's been swimming naked.

Beware of all politicians everywhere. They excelled at recess when they were in school but have excelled at little since.

Hope is the universal currency of a recession. Invest it wisely!

By investing in anonymous cryptocurrencies, you are buying 'insurance' against a recession, as the value of the cryptocurrency could increase significantly if the economy falters and the black market grows.

The global recession has exposed the Slowlane for the fraud it is. With no job, the plan fails. When the stock market loses 50% of your savings, the plan fails. When a housing crisis erases 40% of your illiquid net worth in one year, the plan fails. The plan is a failure because the plan is based on time and factors you can’t control. Unfortunately, millions of people have faithfully invested decades into the plan only to discover the ugly truth: The Slowlane is risky and insufferably impotent.

Recessions are there to take your investment game to the next level. A recession should help you reach your targets sooner.

To the extent that the world’s central banks limited the damage from the recession of 2008–2009, they helped to increase GDP and investment and therefore augmented the capital of the wealthy countries and of the world.

the utilities and services sectors tend to perform well during an economic downturn; and as that downturn segues into a full recession, the technology, cyclicals, and industrial sectors will start to flourish. As the economy begins

After the New Deal, economists began referring to America’s retirement-finance model as a “three-legged stool.” This sturdy tripod was composed of Social Security, private pensions, and combined investments and savings. In recent years, of course, two of those legs have been kicked out. Many Americans saw their assets destroyed by the Great Recession; even before the economic collapse, many had been saving less and less. And since the 1980s, employers have been replacing defined-benefit pensions that are funded by employers and guarantee a monthly sum in perpetuity with 401(k) plans, which often rely on employee contributions and can run dry before death. Marketed as instruments of financial liberation that would allow workers to make their own investment choices, 401(k)s were part of a larger cultural drift in America away from shared responsibilities toward a more precarious individualism. Translation: 401(k)s are vastly cheaper for companies than pension plans. “Over the last generation, we have witnessed a massive transfer of economic risk from broad structures of insurance, including those sponsored by the corporate sector as well as by government, onto the fragile balance sheets of American families,” Yale political scientist Jacob S. Hacker writes in his book The Great Risk Shift. The overarching message: “You are on your own.

By early 2005 all the big Wall Street investment banks were deep into the subprime game. Bear Stearns, Merrill Lynch, Goldman Sachs, and Morgan Stanley all had what they termed “shelves” for their subprime wares, with strange names like HEAT and SAIL and GSAMP, that made it a bit more difficult for the general audience to see that these subprime bonds were being underwritten by Wall Street’s biggest names.

In Kondratieff’s theory, each long cycle has an upswing lasting about twenty-five years, fuelled by the deployment of new technologies and high capital investment; then a downswing of about the same length, usually ending with a depression. In the ‘up’ phase, recessions are rare; in the ‘down’ phase they are frequent. In the up phase, capital flows to productive industries; in the down phase it gets trapped in the finance system.

. . . one of the lessons of a UBI is that our policy outcomes are not inevitabilities but choices. The United States would be significantly richer right now if it had passed more fiscal stimulus at the onset of the Great Recession. It would be richer if it invested in infrastructure. It would be richer if it chose to ensure that no child grew up in poverty. It would be richer if it had worked to make black and white Americans, as well as men and women, true equals. . . poverty in the United States is a choice. Stagnant middle-class incomes are a choice. Technology-fueled mass unemployment is a choice. Racism is a choice. The patriarchy is a choice. This is not to discount how deeply entrenched existing policies, interests, and tendencies are—but to recognize that while they might be entrenched, they are not immutable.

It is ironic that Keynesianism originated as a weapon to combat depression, but became universally accepted and "successful" only during (and because of!) the postwar expansion. At the first sign of renewed world recession, Keynesian theory has proved itself to be a snare and a delusion that has gone into immediate bankruptcy. The resulting "post-Keynesian synthesis" is also the theoretical reason for the reactionary exhumation of the simplistic, neoclassical, and monetarist economic theory of the 1920s. This revival of old theory is highlighted by the award of Nobel prizes in economics to Friedrich von Hayek, whose theoretical work was done before the Great Depression, and Milton Friedman, whose lone voice echoed in the wilderness until the new world economic crisis put his unpopular and antipopulist theories on the agenda of business board rooms and government cabinet rooms in one capitalist country after another. The real reason for the recent interest in fifty-year-old theories is that capital now wants them to legitimize its attack on the welfare state and "unproductive" expenditures on social services, which capital claims to need for "productive" investment in industry, including armaments.

Say what you will of religion, but draw applicable conclusions and comparisons to reach a consensus. Religion = Reli = Prefix to Relic, or an ancient item. In days of old, items were novel, and they inspired devotion to the divine, and in the divine. Now, items are hypnotizing the masses into submission. Take Christ for example. When he broke bread in the Bible, people actually ate, it was useful to their bodies. Compare that to the politics, governments and corrupt, bumbling bureacrats and lobbyists in the economic recession of today. When they "broke bread", the economy nearly collapsed, and the benefactors thereof were only a select, decadent few. There was no bread to be had, so they asked the people for more! Breaking bread went from meaning sharing food and knowledge and wealth of mind and character, to meaning break the system, being libelous, being unaccountable, and robbing the earth. So they married people's paychecks to the land for high ransoms, rents and mortgages, effectively making any renter or landowner either a slave or a slave master once more. We have higher class toys to play with, and believe we are free. The difference is, the love of profit has the potential, and has nearly already enslaved all, it isn't restriced by culture anymore. Truth is not religion. Governments are religions. Truth does not encourage you to worship things. Governments are for profit. Truth is for progress. Governments are about process. When profit goes before progress, the latter suffers. The truest measurement of the quality of progress, will be its immediate and effective results without the aid of material profit. Quality is meticulous, it leaves no stone unturned, it is thorough and detail oriented. It takes its time, but the results are always worth the investment. Profit is quick, it is ruthless, it is unforgiving, it seeks to be first, but confuses being first with being the best, it is long scale suicidal, it is illusory, it is temporary, it is vastly unfulfilling. It breaks families, and it turns friends. It is single track minded, and small minded as well. Quality, would never do that, my friends. Ironic how dealing and concerning with money, some of those who make the most money, and break other's monies are the most unaccountable. People open bank accounts, over spend, and then expect to be held "unaccountable" for their actions. They even act innocent and unaccountable. But I tell you, everything can and will be counted, and accounted for. Peace can be had, but people must first annhilate the love of items, over their own kind.

After months of calling for inflation of housing prices, Krugman in 2002 came right out and said the Fed needed to create a housing bubble. Since 2007, Krugman has repeatedly and angrily denied that was what he was saying, so let me run his comments in their full context: A few months ago the vast majority of business economists mocked concerns about a “double dip,” a second leg to the downturn. But there were a few dogged iconoclasts out there, most notably Stephen Roach at Morgan Stanley. As I’ve repeatedly said in this column, the arguments of the double-dippers made a lot of sense. And their story now looks more plausible than ever. The basic point is that the recession of 2001 wasn’t a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.6 Well, Krugman got exactly what he wanted.

Brazil fell into recession in the first half of the year, according to official data which showed the economy shrinking by 0.6% in the second quarter and 0.2% in the first. The main reason was another big drop in investment. The government had said that it expects GDP to grow by 1.8% this year, but that now seems unlikely.

Increased investment by businesses and a slightly improved trade picture prompted the revision, which lifted the estimated annual rate of growth in April, May and June to 4.2 percent from the government's initial reading of 4 percent in late July. Since the economy emerged from the recession five years ago, companies have been hesitant to spend heavily on new capacity, but these figures and other recent data indicate that is finally changing. In a separate report Thursday, the Labor Department said initial claims for unemployment benefits dropped last week by 1,000, to 298,000, helping push the eight-week average for new claims to below 300,000 for the first time since April 2006, well before the onset of the recession.

In the 2001 technology industry recession, Intel invested $2 billion in new chip manufacturing facilities and aggressively marketed new dual-core technology in order to grab market share from competitor AMD.

Indeed, neither the public clamor about the dislocations created by economic globalization nor the massive shocks produced by the financial crisis of 2008 and the ensuing Great Recession have derailed the process of international economic integration. It continues largely unabated, and the predictions of a protectionist surge prompted by the attempts of countries to fence in their economies to protect jobs have been proven wrong. International trade and investment flows continue to grow and to feed the forces that constrain the power of traditional business players.

The evaluation of securities and businesses for investment purposes has always involved a mixture of qualitative and quantitative factors. At the one extreme, the analyst exclusively oriented to qualitative factors would say, “Buy the right company (with the right prospects, inherent industry conditions, management, etc.) and the price will take care of itself.” On the other hand, the quantitative spokesman would say, “Buy at the right price and the company (and stock) will take care of itself.” As is so often the pleasant result in the securities world, money can be made with either approach. And, of course, any analyst combines the two to some extent—his classification in either school would depend on the relative weight he assigns to the various factors and not to his consideration of one group of factors to the exclusion of the other group. Interestingly enough, although I consider myself to be primarily in the quantitative school (and as I write this no one has come back from recess—I may be the only one left in the class), the really sensational ideas I have had over the years have been heavily weighted toward the qualitative side where I have had a “high-probability insight.” This is what causes the cash register to really sing. However, it is an infrequent occurrence, as insights usually are, and, of course, no insight is required on the quantitative side—the figures should hit you over the head with a baseball bat. So the really big money tends to be made by investors who are right on qualitative decisions but, at least in my opinion, the more sure money tends to be made on the obvious quantitative decisions. As

According to the U.S. Bureau of Labor Statistics, “in the last few years, student loan debt has hovered around the $1 trillion mark, becoming the second-largest consumer obligation after mortgages and invoking parallels with the housing bubble that precipitated the 2007–2009 recession…the proportion of the U.S. population with student loans increased from about 7 percent in 2003 to about 15 percent in 2012; in addition, over the same period, the average student loan debt for a 40-year-old borrower almost doubled, reaching a level of more than $30,000.” Grad students incur even more debt, and the salaries, especially in education, aren’t usually high enough to make that master’s degree (which is a great academic boost) a worthwhile return on investment financially. If it turns out that college isn’t for you or if problems prevent you from graduating, you can end up with lots of debt and no degree to show for it. Having hours toward college doesn’t qualify you for a job that requires a degree, so you could end up with the debt and without the necessary letters behind your name. In contrast, blue collar training requires fewer years and costs less than a college degree; in some fields, you learn on the job while being paid.

Nobody likes recessions, but as our experience proves, they don’t have to destroy the foundations for long-term growth you’ve laid. The key is to stay calm while everyone else is panicking. Remember, as I’ve said, recessions are temporary. Good times will return eventually. As a leader, you have to think about the recovery and what your organization will need to perform. Don’t cut all of your growth investments just to get the best possible shareholder returns. Do everything you can not to cut them, delivering returns that are good enough to keep investors reasonably happy. By taking control of the downturn in this way, you can maintain all of the investments you’ve made in your business up to that point, and keep your ability to perform over the long-term intact.

Between the end of the Great Recession, in June 2009, and 2019, net fixed investment in the oil and gas extraction sector represented more than two-thirds of total U.S. net industrial investment. In another measure, between 2009 and 2019, the increases in oil and gas have accounted for 40 percent of the cumulative growth in U.S. industrial production.

I had felt compelled to write this letter because we had emerged from the Great Recession of 2008 in great shape, outpacing our peers and also Honeywell’s historical performance during recessions. While the experience was still fresh, I wanted to capture my reflections on how we had done it, in the hopes that my successors would have an easier time dealing with similar situations in the future and wouldn’t have to waste time learning what we’d learned. If you haven’t written such postmortem analyses (or white papers, as we called them) for your organization, I strongly suggest it. As we saw in chapter 1, intellectual rigor is vital for organizations seeking to perform well today and tomorrow, and leaders are uniquely positioned to establish and maintain that rigor.

Leaders often panic when recessions strike. They go into survival mode, managing quarter-to-quarter and shoring up their numbers by cutting back on the long-term growth projects we’ve described in previous pages. Such actions might please investors in the moment, but they undo hard-won progress the organization has made. This is a big mistake, and one thankfully we avoided. By looking for creative solutions to the financial challenges we faced during the Great Recession, we maintained our investments while still delivering results that outdid our competitors’ performance.

I asked our business leaders in the depths of the recession to begin working with their suppliers to prepare for the recovery. This seemed impossible to leaders at the time, since many economists and some of my staff were predicting that we’d see an L-shaped recovery—one that was essentially nonexistent. Our sales, according to this view, would never rebound to their prerecession levels. I insisted that recovery would come, just as it always had in the past. And when it did, our short-cycle businesses had to make sure they were first in line for supplies. Our leaders began these conversations, working with suppliers up front to lock in first priority over our competitors when the recovery came. This represented independent thinking on our part—our competitors weren’t doing this. We also took the opportunity to negotiate better payment terms, price reductions, and long-term deals, which were all easier to obtain during a recession. As a result of this effort, we got a big lift as the economy improved, outpacing our competitors in our sales growth, to the delight of our investors.

Understanding the important role played by leaders, we made sure, as I’ve noted, to keep our annual senior leadership meeting intact, even as we were cutting labor costs. The event wasn’t as nice as in previous years, but we needed it so that we could convey to leaders our general thinking about continuing to serve customers, protecting our talent base, and so on. We also needed to acknowledge how bad the recession was and reinforce that this wasn’t permanent—good times would return.

value stocks have actually done better than growth stocks during both bear markets and economic recessions, so it is doubtful this is the answer.

It’s particularly important in this vein to note the extent to which economic expectations can be self-fulfilling. If people (and companies) believe the future will be good, they’ll spend more and invest more . . . and the future will be good, and vice versa. It’s my belief that most companies concluded that the Crisis of 2008 wouldn’t be followed by a V-shaped recovery, as had been the rule in the last few recessions. Thus they declined to expand factories or workforces, and the resulting recovery was modest and gradual in the U.S. (and even more anemic elsewhere).

In November 2013, Credit Suisse published research confirming this, saying that “US net business investment has rebounded – but, at around 1.5% of GDP, still only stands at the trough levels seen during the past two recessions”.[46] It showed that since the early 1980s, the peaks reached by net business investment as a share of GDP have been declining in each economic recovery. As John Smith writes in Imperialism In The Twenty First Century: “A notable effect of the investment strike is that the age of the capital stock in the US has been on a long-term rising trend since 1980 and started climbing rapidly after the turn of the millennium, reaching record levels several years before the crisis.”[47] Smith points out that in the UK the biggest counterpart to the government’s fiscal deficit (the difference between total revenue and total expenditure) of 8.8% of GDP in 2011 was “a corporate surplus of 5.5% of GDP, unspent cash that sucked huge demand out of the UK economy”.[48] The problem is even worse in Japan, where huge corporate surpluses and low rates of investment have been the norm since the economy entered deflation in the early 1990s. According to Martin Wolf in the FT, “the sum of depreciation and retained earnings of corporate Japan was a staggering 29.5% of GDP in 2011, against just [sic] 16% in the US, which is itself struggling with a corporate financial surplus”.[49]

If you can tolerate the inherent volatility of corporate bonds—especially during recessions—you should strongly consider them as a long-term investment option. Investors who concentrate their corporate bond holdings in the BBB and BB ratings universe reap particularly good benefits. These bonds have the potential to reward investors with a 3 percent annualized premium over a government bond of a similar duration.

My investing strategy doesn't rely on picking the right sector, or timing the next recession. It relies on a high savings rate, patience, optimism that the global economy will create value over the next several decases.

Thanksgiving has become the first day of what in now thought of as the “Holy or Holiday Season.” The “holidays” as they are generally known, are an annually recurring period of time from late November to early January. These days are also recognized by many other countries as well, with the “Christmas Tree” and all the trimmings, generally being considered secular. This period of time incorporates the shopping days, which comprises a peak season for the retail market. Regardless of religious affiliation, children and adults alike enjoy the many window displays and Christmas tree lighting ceremonies. To a great extent it really doesn’t matter that there are still some people believing that the commercialism of these holidays is blasphemy and that they should be reserved strictly for worship. There are virtually, no valid reasons why we can’t all enjoy these days in our own way. Children of all faiths and ages should be able to understand the true meaning and still be able to enjoy the music, surprises and magic of the season… This year we are again faced with a severely, politically divided country; with a great number of people fearing for their future. It might be too much to hope for, that politicians will be able to put aside their differences. Unfortunately many of them still believe that their hypocritical concept of Christianity is greater than that of their opposition. Regardless, they should however understand that we are all equal in the eyes of God as well as the law, and that America was built by a diverse people. Let us not slip back into a newer form of “Small Minded Bigotry,” but rather forge ahead in a unified way making our country stronger. The time has come to energize our nation by rebuilding our bridges and highways. Rebuilding our airports, investing in high-speed trains, and making education affordable is the way to a more productive future. If we head down this ambitious path of development, we will create jobs and put more people to work. It will help the middle class to regain their footing and it will strengthen our slowly growing economy. When our citizens earn more, the economy will lift us all out of the recession that so many.

What causes recessions? Many economists talk about the need for a consumer economy, but we can't have a consumer economy if people can't afford to consume, and the only way they can afford to consume over the long run is if they create new wealth to either consume at that time or to defer as investments for later consumption. Simply put, the best way to have a functioning economy is to focus on having a wealth-producing economy. But when wealth can't be created in spite of the need for such, the production of wealth has been artificially limited, and this artificial limitation is the root cause of business recessions.

As Musk put it, “Try to imagine explaining that you’re investing in an electric car company, and everything you read about the car company sounds like it is shit and doomed and it’s a recession and no one is buying cars.” All Musk had to do to dig Tesla out of this conundrum was lose his entire fortune and verge on a nervous breakdown.

Algorithmic profits Algorithmic marketing is allowing companies to do things they couldn’t do before, and some early signs show it can deliver big value, especially in financial or information services. In North America, Amazon.com grew 30 to 40 percent, quarter after quarter, throughout the United States’ 2008-2012 recession, while other major retailers shrank or went out of business. From 2006 to 2010, Amazon spent 5.6 percent of its sales revenue on IT, while rivals Target and Best Buy spent 1.3% and 0.5%, respectively. That investment and focus has yielded increasingly sophisticated recommendation engines that deliver over 35 percent of all sales, an automated e-mail/customer service systems (90 percent are automated, versus 44 percent for the average retailer) that are a key component of its best-in-class customer satisfaction, and dynamic pricing systems that crawl the Web and react to competitor pricing and stock levels by altering prices on Amazon.com, in some cases every 15 seconds.

The evaluation of securities and businesses for investment purposes has always involved a mixture of qualitative and quantitative factors. At the one extreme, the analyst exclusively oriented to qualitative factors would say, “Buy the right company (with the right prospects, inherent industry conditions, management, etc.) and the price will take care of itself.” On the other hand, the quantitative spokesman would say, “Buy at the right price and the company (and stock) will take care of itself.” . . . Interestingly enough, although I consider myself to be primarily in the quantitative school (and as I write this no one has come back from recess—I may be the only one left in the class), the really sensational ideas I have had over the years have been heavily weighted toward the qualitative side where I have had a “high-probability insight.” This is what causes the cash register to sing. However, it is an infrequent occurrence, as insights usually are, and, of course, no insight is required on the quantitative side—the figures should hit you over the head with a baseball bat. So the really big money tends to be made by investors who are right on qualitative decisions, but, at least in my opinion, the more sure money tends to be made on the obvious quantitative decisions.

This is why recessions destroy companies who are built solely on debt, whereas companies who maintain healthy cash reserves (like Berkshire Hathaway) can ride the wave through to the other side.

So equally smart people can disagree about how and why recessions happen, how you should invest your money, what you should prioritize, how much risk you should take, and so on.

banks in which oil exporters had invested were lending money to anyone who’d take it. It was a system ready to collapse at the slightest breath of change. When that change came, with the high interest rates and global recession at the end of the 1970s, the accumulated debt set large parts of Latin America, Africa and eventually Asia on the route to bankruptcy.

Compared to a conventional debt instrument, what makes securitization so attractive is the fact that the airline often retains the junior tranches. These become an asset on its balance sheet. Any discount associated with the low credit rating of these layers is more than offset by the discount on the purchase of the aircraft, thereby creating an immediate profit and cash inflow on delivery of the aircraft. Such are the wonders of modern financial alchemy. Under good, even normal, business conditions, the airline makes lease payments to the securitization vehicle. But in a recession or a bankruptcy filing, when payments are suspended, the owners of the senior strata are able to seize the collateral. The junior participants in the securitization have no rights, and any such assets on the airline’s balance sheet must be written down to zero, further increasing the airline’s losses. By this clever piece of financial engineering, the airline gets shiny new planes for an extremely low cost of funds–recently as low as 6 per cent–while equity shareholders carry nearly all of the business risk. That an industry which has rarely earned an acceptable return on capital should have access to such cheap capital is quite astonishing.

Narrative economics demonstrates how popular stories change through time to affect economic outcomes, including not only recessions and depressions, but also other important economic phenomena. The idea that house prices can only go up attaches to the stories of rich house flippers seen on television. The idea that gold is the safest investment attaches to stories of war and depression. These narratives have a contagious element, even if their attachment to any given celebrity is tenuous.

Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works. So equally smart people can disagree about how and why recessions happen, how you should invest your money, what you should prioritize, how much risk you should take, and so on.

In the Global Financial Crisis of 2008, it seemed at first that Europe could dodge the blow that was hitting the United States. The unspoken reality was that in the 6 months after September 2008 European governments had to quietly spend 3 trillion dollars to bail out their troubled banks. In the case of the periphery countries, the main problem came from the abrupt departure of capital that up till then had been flowing in abundance to finance expansion plans. In the case of the strong countries’ banks, the travails came from their excessive exposure to sub-prime investments. The ensuing recession, plus the effort to rescue the banks, put several countries in a vulnerable situation. This was more apparent after the financial markets became jittery on discovering the magnitude of the Greek problem.

Consider what would happen if you saved $1 every month from 1900 to 2019. You could invest that $1 into the U.S. stock market every month, rain or shine. It doesn’t matter if economists are screaming about a looming recession or new bear market. You just keep investing. Let’s call an investor who does this Sue. But maybe investing during a recession is too scary. So perhaps you invest your $1 in the stock market when the economy is not in a recession, sell everything when it’s in a recession and save your monthly dollar in cash, and invest everything back into the stock market when the recession ends. We’ll call this investor Jim. Or perhaps it takes a few months for a recession to scare you out, and then it takes a while to regain confidence before you get back in the market. You invest $1 in stocks when there’s no recession, sell six months after a recession begins, and invest back in six months after a recession ends. We’ll call you Tom. How much money would these three investors end up with over time? Sue ends up with $435,551. Jim has $257,386. Tom $234,476.

The government wants to keep the capital markets healthy and thriving. They will do whatever in their power to avoid or reverse a recession.

Some investment advisors have turned against dollar-cost averaging because, as even Burt Malkiel admits, it’s not the most productive strategy for investing in the stock market when it keeps going straight up—like it’s been doing in the years following the recent Great Recession.

Stock buy‐backs – companies using cash from their balance sheets to purchase their stock in the open market for the purpose of retiring that stock and increasing their earnings per share – hit an all‐time high in 2018, with over $800 billion spent on such efforts. That was an increase of over 50 percent from the prior year and represented the most extensive annual stock buy‐back total ever recorded (the previous record was 2007, just before the Great Recession of 2008–2009). Contrast that to more traditional R&D investing that increased at a much more modest 8.8 percent that same year.20 When given the choice of where to invest the additional dollars generated from paying lower taxes, companies chose to invest in boosting their stock price, not in their businesses' future development or in their communities.

After long years tolerating tax evasion by their fellow members of the ruling class, the political leaders of the big Western economies had been forced by the cost of the bank bailouts, the subsequent recession and increasingly widespread hostility to cuts in public services to go after those missing tax revenues. Hence the Americans' pursuit of UBS, Credit Suisse, BSI and the rest. But the City was in a different position. It was not the UK Treasury that the City's clients were primarily cheating. It was everyone else's. And there was one more fact, so huge and so obvious that everyone ignored it the way only problems of such magnitude could be ignored. Tax evasion deprived governments of revenue. Money laundering was the other side of the same coin. Like tax dodging, it was a subversion of money's role as a token of reciprocal altruism that allowed large and diverse societies to function. But while tax evasion sucked money out, money laundering pumped money in. If you could stop yourself thinking about its origins, those inflows of dirty money from around the world were just another source of investment into otherwise declining economies.

We can spend years trying to figure out how Buffett achieved his investment returns: how he found the best companies, the cheapest stocks, the best managers. That’s hard. Less hard but equally important is pointing out what he didn’t do. He didn’t get carried away with debt. He didn’t panic and sell during the 14 recessions he’s lived through. He didn’t sully his business reputation. He didn’t attach himself to one strategy, one world view, or one passing trend.

More than 200 billion was invested in sustainable businesses worldwide in 2010-a 40 percent increase from 2009-even as many other sectors sagged in the worst recession in eighty years. Biomimicry is sometimes described as a discipline of sustainable engineering, but any truly sustainable product or business is inherently biomimetic. Biomimicry creates products based on nature's peak achievers-all of whom are sustainable.

The recession and regression of any society are always an indication of how poorly the citizens of that country understand the value of time.

the sooner one starts to invest using the principle of compound interest, by buying great businesses—that have survived recessions, depressions and wars—that have paid and raised their annual dividends for at least 25 years and longer, the sooner one is able to attain financial freedom.

By 2008, storm clouds were gathering over Microsoft. PC shipments, the financial lifeblood of Microsoft, had leveled off. Meanwhile sales of Apple and Google smartphones and tablets were on the rise, producing growing revenues from search and online advertising that Microsoft hadn’t matched. Meanwhile, Amazon had quietly launched Amazon Web Services (AWS), establishing itself for years to come as a leader in the lucrative, rapidly growing cloud services business. The logic behind the advent of the cloud was simple and compelling. The PC Revolution of the 1980s, led by Microsoft, Intel, Apple, and others, had made computing accessible to homes and offices around the world. The 1990s had ushered in the client/server era to meet the needs of millions of users who wanted to share data over networks rather than on floppy disks. But the cost of maintaining servers in an ever-growing sea of data—and the advent of businesses like Amazon, Office 365, Google, and Facebook—simply outpaced the ability for servers to keep up. The emergence of cloud services fundamentally shifted the economics of computing. It standardized and pooled computing resources and automated maintenance tasks once done manually. It allowed for elastic scaling up or down on a self-service, pay-as-you-go basis. Cloud providers invested in enormous data ​centers around the world and then rented them out at a lower cost per user. This was the Cloud Revolution. Amazon was one of the first to cash in with AWS. They figured out early on that the same cloud infrastructure they used to sell books, movies, and other retail items could be rented, like a time-share, to other businesses and startups at a much lower price than it would take for each company to build its own cloud. By June 2008, Amazon already had 180,000 developers building applications and services for their cloud platform. Microsoft did not yet have a commercially viable cloud platform. All of this spelled trouble for Microsoft. Even before the Great Recession of 2008, our stock had begun a downward slide. In a long-planned move, Bill Gates left the company that year to focus on the Bill & Melinda Gates Foundation. But others were leaving, too. Among them, Kevin Johnson, president of the Windows and online services business, announced he would leave to become CEO of Juniper Networks. In their letter to shareholders that year, Bill and Steve Ballmer noted that Ray Ozzie, creator of Lotus Notes, had been named the company’s new Chief Software Architect (Bill’s old title), reflecting the fact that a new generation of leaders was stepping up in areas like online advertising and search. There was no mention of the cloud in that year’s shareholder letter, but, to his credit, Steve had a game plan and a wider view of the playing field.