Crash at Mad Wallstreet

Crash at Mad Wallstreet

By Financial Imaginer

In the late 1990’s we used to go to a club called “Mad Wallstreet” in central Switzerland. It was the club everyone loved to go to, and it had a really cool feature: Prices for drinks used to be shown like stock market tickers. They fluctuated in line with demand, the general mood on the dance floor and it played with our emotions. We learned how to take advantage of a market crash!

The more people ordered drinks, the higher the prices would go. If at one point demand started to fade away, the guys behind the counter would initiate a stock market crash. Whenever that happened, all the drinks from simple beers to cocktails and shots would suddenly be incredibly cheap and the crowd would cheer!

We were usually in the best mood when prices crashed as it meant a round of new drinks for everyone! We loved the excitement of that place but hated when prices were at all-time highs.

Never let a Good Crisis go to Waste

Recently, while reminiscing about these memories I asked myself:

Why are we not the same when the stock market crashes?

Instead of panic selling, we should be panic buying!

If the stock market dips, it should be like a discount offer in the supermarket. If there’s even an actual stock market crash, we should look at it like a “Black Friday Sale”.

Stock market crashes don’t happen every year, there are just a few opportunities like this in your life.

Never let a good crisis go to waste.

A crisis offers the opportunity to do things you couldn’t do before.

How come so few of us like to buy and invest on such occasions?

It’s a question of how you are prepared. Your mindset, who you surround yourself with, and whether or not you have a plan define your actions.

How to Prepare for a Crash?

The very best thing to do is to always be prepared for one.

You don’t want to be in a situation where you might be forced to sell your assets at panic prices.

You do want to be prepared to take advantage of such a situation!

To be prepared, have a plan!

Keep some cash on hand, have a buying list or a rebalancing plan for your portfolio ready in the drawer. When the dip or crash happens, follow through with your plan. Buy more stocks with your cash or rebalance your portfolio towards more risk.

Warren Buffett always keeps a potential buying list in his drawer. He starts by identifying what value he sees in certain companies and then decides at which price he would be interested to buy.

“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.”  Warren Buffett

If you are prepared for a stock market crash, you will appreciate them coming.

To continue reading, please go to the original article here:

https://www.financial-imagineer.com/crash-at-mad-wallstreet/

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