Saturday, October 11, 2008

Financial Crisis v/s Any Other Crisis

A crisis is a crisis. Be it financial, that is raging furiously these days, or a personal crisis.

All crisis originates with some excess/wrong doings/ mistakes on the part of an individual or a company. The financial crisis has its origins in the sub prime lendings in the US and it is engulfing all and sundry. Likewise, a personal crisis too is an offshoot of some mistakes. Like Pravin Mahajan killing his own brother and pulling the entire Mahajan family into a crisis. Or the Ayushi murder case.

Everybody loves distress stories And then the media goes overboard since it knows that and it feeds on the raging fire.

Here are my thoughts on what to do in these troubled times:

  • Take it on your chin: Understand the reason and the direction from which the blow is coming and accept that blow. Instead of ducking issues or avoiding them. It will give you a perspective on how it is going to affect you and you can take some corrective actions. Like you could have gone for more allocation for liquid/gold funds. Or go for a SOS: Short only Strategy.
  • Put some wax in your ears: Media goes overboard with distress stories and your blood pressure shoots up too. All those stories in the name of analysis/insights do not solve the problem. Remember, there is a difference between discussing a problem and solving a problem. In times like this, it's a boon to be able to withdraw!
  • It's a catharsis: All crisis are lessons. Failures can be very good feedback if you are willing to look at it that way. It also gives you a perspective on past mistakes and the way out.
  • What goes down, comes up: I love the "Sine curve". Sometimes it goes up and then goes down, only to go up again. It's a continuous loop.

I am an eternal optimist. Are you one?

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