What it's about
There is always some chance of recession in any year. But the evidence suggests that expansions don't die of old age. (Janet Yellen)
I felt like the premise of the book was a bit misleading. I expected to read more about the qualities, indicators, and strategies you could employ during a recession to continue making money.
I think the book was more focused on providing uber-tactical advice about evaluating your situation and preparing for the worst. If you’re worried about losing your job and are low on capital, this is probably the book for you.
All in all, a bit too much on keeping your job. A bit too much preaching. I don’t understand how recessions work in more depth than I did before.
Values, lessons, and notes
There are easily available metrics for predicting incoming recessions, including:
- ISM Manufacturing Index (Institute for Supply Management)
- Beige Book (Federal Reserve)
Recessions are officially declared by the NBER, but often once it’s too late.
On a personal level, dealing with a recession is about being prepared:
- Having readily available work connections (think layoffs, finding a new job).
- Avoiding speculative investments, maintaining sizable cash funds.
- Picking industries that are evergreen, not beholden to market conditions.
The rest of the book tries to provide tactical advice for various life situations: student, factory worker, tech professionals. It’s a bit vague, but in essence: try to keep your job, prepare for the worst, and evaluate your options.
For people with existing capital, the general advice is:
- After a depression in prices, it’s a good time to buy real estate, start a business, or invest in stocks (funds, not individual companies).
- If you fall in the boat of unemployment, your opportunity cost to do various things is significantly lowered. It’s a good time to go back to school, or travel, and so on.
We’re in a unique situation now (2022), as most recessions typically don’t coincide with high inflation. Recessions and inflation are typically thought to be substitute forces, but they currently coexist.
That being said, we’re not currently in a recession, but we’re already starting to see recession-like conditions as of early 2022.
Some economists believe we may enter one officially by the end of 2022. The Federal Reserve will likely continue increasing interest rates through 2023 to combat inflation.