Posts Tagged ‘Emotional Anchor’
Sunday, September 19th, 2010
“I’m a huge bull on this country … we won’t have a double dip recession. I see our businesses coming back almost across the board.” .…Warren Buffett, Berkshire Hathaway
“GE is now finding it profitable to build manufacturing and service centers in the United States rather than overseas, because it is more competitive to do so.” … Jeff Immelt, CEO, GE
“I am very enthusiastic about what the future holds” .… Steve Ballmer, CEO, Microsoft
One of the most important roles for advisors is to be an emotional anchor for clients … preventing the highs from being too high and the lows from being too low.
Today, many Canadians are pessimistic about the U.S. and global economies … driven in large measure by daunting headlines about slow growth, weak housing prices, high unemployment and deficit problems in much of the developed world, as well as political discord in Washington.
This pessimism is amplified by the media coverage given to voices of gloom such as Nouriel Roubini and David Rosenberg.
Presenting an upbeat outlook
That’s why a conference that took place just last Monday gives advisors the chance to provide clients with some offsetting perspective on the mid and long term positives for the United States.
Speaking on Monday September 13 to 2000 business and political leaders in Montana, Warren Buffett, Steve Ballmer of Microsoft and GE’s Jeff Immelt talked about good news at their companies and a positive outlook for the future.
Here are two articles on this conference that you can send clients, one from Bloomberg and other from Yahoo News:
And here are some of their comments:
Warren Buffett, Berkshire Hathaway:
“I’m a huge bull on this country … we won’t have a double dip recession. I see our businesses coming back almost across the board … … it’s night and day from a year ago.”
“I’ve seen sentiment turn sour in the last three months or so, generally in the media. I don’t see that in our businesses … we’re employing more people than a month ago, two months ago.”
“The things that worked for the country through a century of two world wars, a depression and more — all while increasing the standard of living — will work again.”
“Banks are lending money again, businesses are hiring employees and I expect the economy to come back stronger than ever.”
Steve Ballmer, Microsoft:
“There soon will be more technological advancement and invention than there was during the Internet era and that will help drive business growth.”
“I am very enthusiastic about what the future holds for our industry and what our industry will mean for growth in other industries.”
“We will see new technologies that move beyond the Internet to tie together computers, phones, televisions and data centers to create amazing new products. And the pace of innovation will increase as technology makes workers more productive.”
“All areas of science today are moving forward more quickly. The speed of scientific breakthrough is accelerating.”
Jeff Immelt, GE:
“Angry political rhetoric is not helpful and headlines are too focused on finding negative indicators.”
“Business at GE is improving. Signs across the world show growth improving as evidenced by a rise in GE’s orders.”
“GE is now finding it profitable to build manufacturing and service centers in the United States rather than overseas, because it is more competitive to do so.”
“The U.S.‘s central challenge will be to speed growth. We need an increase in exports of manufactured goods to help compete globally. Expansion will be further bolstered when smaller businesses and consumers regain confidence in banks and are able to borrow more.”
“We need people to be able to feel like they’re going to get loans, the process is going to work and that they understand the rules.”
“The U.S. is going to need to adjust, though. The economy since the 1970s has been driven by consumer credit and a misguided notion in building a “lazy” service economy. Manufacturing, with an aim to reduce the trade deficit, is the key.”
“The push for an exclusively service-based economy was just wrong. It was stupid. It was insane .The future of the economy has to be as an exporter.”
Tags: Berkshire Hathaway, Buffett Rules, Ceo Microsoft, David Rosenberg, Discord, Double Dip Recession, Economy Leaders, Emotional Anchor, Global Economies, Jeff Immelt, Last Monday, Lows, News Yahoo, Nouriel Roubini, Pessimism, Political Leaders, Positive Outlook, Steve Ballmer, Upbeat Outlook, Warren Buffett
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Tuesday, April 20th, 2010
These days, few issues are more important or contentious than the outlook for the U.S. economy .
The hard reality is that we won’t see a global recovery without participation from the American economy. That’s exactly why this represents a great chance for advisors to prove their value.
There’s no question that the U.S. faces formidable issues. Among these are persistently depressed housing prices, the quality of some of the mortgages still on bank books, flagging consumer confidence, high unemployment, the plummeting dollar, trade deficits, massive unfunded social security liabilities, record budget deficits and debt levels that will require foreign investors to continue to buy U.S debt.
Furthermore, with increasingly partisan and dysfunctional political gridlock in Washington, it’s hard to marshall much confidence in the leadership on these problems from Capitol Hill.
Given this daunting list of problems, it’s easy for clients to feel overwhelmed by all the bad news.
And yet that’s precisely where advisors have a key role to play.
Arguably, the one area where advisors provide the most value is being an emotional anchor for clients — keeping the highs from being too high during times of untrammeled optimism such as we saw in 2000 and the lows from being too low during periods of absolute pessimism such as we saw a year ago and in many cases still see today.
Playing that role takes more than just having an opinion — you need credible evidence to back you up.
This week, Business Week’s cover story is titled “Why the Obama plan is working”. It outlines a number of positive, under reported indicators — rising forecasts for growth in the U.S. economy, increased corporate profits, a boom in productivity and a more stable environment generally.
Last week, two of the New York Times’ most respected columnists also weighed in on this topic.
Thomas Friedman is winner of three Pulitzer prizes and author of “The world is flat”, the 2005 analysis of the impact of the globalization.
His April 6 column focused on what it will take to build a bridge for the American economy into the 21st century. Here’s part of what he wrote:
“Obama-ism posits that we are now in a hypercompetitive global economy, where the country that thrives will be the one that brings together the most educated, creative and diverse work force with the best infrastructure — bandwidth, ports, airports, high-speed rail and good governance.
And we’re in a world with a warming climate that is growing from 6.8 billion people to 9.2 billion by 2050, so demand for clean energy is going to go through the roof. Therefore, E.T. — energy technology — is going to be the next great global industry.”
David Brooks is sometimes referred to as the New York Times “house conservative”, providing a counterpoint to the liberal voices on its editorial pages. On April 5, his column started with a litany of America’s woes — and then switched to the offsetting good news.
He talked about the positive demographic trends in the U.S. and then discussed the important role of immigration, innovation, productivity and America’s history of dynamism. Here’s an excerpt from his column:
“In addition, the U.S. remains a magnet for immigrants. Global attitudes about immigration are diverging, and the U.S. is among the best at assimilating them (while China is exceptionally poor). As a result, half the world’s skilled immigrants come to the U.S… between 1990 and 2005, immigrants started a quarter of the new venture-backed public companies.
The United States already measures at the top or close to the top of nearly every global measure of economic competitiveness. A comprehensive 2008 Rand Corporation study found that the U.S. leads the world in scientific and technological development. The U.S. now accounts for a third of the world’s research-and-development spending. Partly as a result, the average American worker is nearly 10 times more productive than the average Chinese worker, a gap that will close but not go away in our lifetimes.”
Neither column paints an entirely rosy picture and both talk about the need to put America’s fiscal house in order and for tough decisions on spending cuts and tax increases.
At the same time, they provide some useful perspective on the strengths that the U.S. brings to the ongoing global fight for economic supremacy … and can be useful ammunition in reminding clients about some of the positives that America brings to this battle.
For those who want to read more, here are links to the Business Week story and the columns by Brooks and Friedman:
Business Week: Why the Obama plan is working http://www.businessweek.com/magazine/content/10_16/b4174028669540.htm
David Brooks: Relax we’ll be fine http://www.nytimes.com/2010/04/06/opinion/06brooks.html?scp=3&sq=david%20brooks&st=cse
Thomas Friedman: Who’s up for building bridges? http://www.nytimes.com/2010/04/07/opinion/07friedman.html?scp=2&sq=friedman&st=cse
Tags: American Economy, Bank Books, Budget Deficits, Business Week, Consumer Confidence, Corporate Profits, Credible Evidence, Debt Levels, Dollar Trade, Emotional Anchor, Foreign Investors, Global Recovery, New York Times, Obama, Pessimism, Political Gridlock, Record Budget, Stable Environment, Target, Trade Deficits
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