CheckMate

Same story, different day…

I saw this headline early this morning (how could I not, given that it was everywhere):

“Wall Street to tumble on disappointing 2Q results”

As I write this a few hours later, here’s what’s been written over on the Yahoo Market Update:

“It looked like Tuesday was going to be an ugly session, with stocks opening sharply lower following worse-than-expected earnings reports from several widely held tech and financial names. Stocks then staged a turnaround, as a drop in oil prices prompted an impressive early afternoon recovery, led by the financial sector.”

(Albeit in the fine print, not the blaring headline, of course.)

Wait - what happened to the “tumble”?

Then again, there are about three hours left in the trading day as I write this, and the naysayers could still turn out to be right. But what does it matter?

I’m definitely not making light of the tough times some people and companies are finding themselves in now or trying to pretend they don’t exist. But it does get old watching people write this kind of stuff daily - why add to the problems we already have by predicting gloom-and-doom that may or may not even happen? I don’t see how it helps anything.

No matter what your personal situation is right now, just don’t get caught up in it. No point in it in general, and surely something you can’t afford to do when you’re a financial advisor.

Talk about counterpoint and irony…

You may have seen these two stories that both came out today - I know the juxtaposition really jumped at me:

GM to cut jobs, suspend dividend

Beleaguered automaker also plans asset sales, aiming for $10 billion in ‘cash improvements’ by 2009. CEO Wagoner says ‘difficult decisions’ necessary for survival.

By Aaron Smith, CNNMoney.com staff writer
July 15, 2008

NEW YORK (CNNMoney.com) — General Motors Corp. said Tuesday it will suspend its dividend, sell off $4 billion to $7 billion worth of assets and cut 20% worth of salaried cash costs in an overall plan to save billions of dollars.

(Read more here.)

Volkswagen to build plant in Chattanooga

Tuesday, July 15, 2008
By: Mike Pare

Volkswagen AG will build its first United States assembly plant in Chattanooga, officials said today.

Europe’s biggest automaker said it will put a nearly $1 billion investment in Chattanooga’s Enterprise South Industrial Park.

The plant is expected to create 2,000 jobs. It is expected to open in 2011.

(Read more here.)

Classic example of the same economic conditions with vastly different responses from companies in the same industry to those conditions.

Just something to keep in mind in the midst of all the recession talk and economic gloom-and-doom - there are those who are not only doing well, but adapting and thriving.

Same thing applies to financial advisors, too.

And I’m not talking about oil companies…

As you may have noticed, I like to write about things that run contrary to popularly accepted thought and don’t fit the “well, everybody knows that” mold. In this case, “everybody knows that the cost of a barrel of oil going up like it has stinks and it hurts everybody.”

Trust me, I’m not any happier than anybody else about the gas prices now, but, contrary to popular belief, the current major oil and gas price increases aren’t all bad and have even helped some businesses.

ABC News just did a story called “Oil Price Fallout: Jobs Coming Home?” where they mentioned, among other things:

• a furniture designer is having her chests made in North Carolina again (a place that’s lost many jobs to Chinese furniture manufacturers) because they now cost five times more to ship from China

• a company that makes heaters to keep football players warm is moving all its production back to Kentucky from China

• a hair care company is going to move all of its production from China to Houston which means 1,000 new jobs

Two things I want you to keep in mind here…

First, as I keep saying, don’t buy into all the gloom-and-doom you hear on the news all the time. There are still businesses doing well in seemingly tough times, including the wealth management portions of the major financial services firms.

Second, as a budding financial advisor, you need to pay attention to trends like these, especially those that don’t always get a lot of attention in the press, because they can have a major impact on where you invest your clients’ money.