The speaker discusses the cyclic nature of the stock market and advises against trying to predict short-term changes. He then examines the potential benefits and drawbacks of starting a business during an economic downturn.
While the next 18 months may be tough for the US consumer with unemployment rising, inflation staying high, and consumption declining, the equity markets are starting to bottom out, and a rebound could be seen by the end of this year or early next year. However, it's important to note that even if a stock sees a 50% rally after a 50% decline, it will still be 25% off from its original value.
The speaker suggests that in order to be trusted in the future, it's important to clear any past mistakes, and it's wise to prepare for a possible recession in 2023 to avoid mass panic and be careful about margin debt.
Startups are being advised to have two and a half years' runway and two years' cushion in preparation for a probable recession. Uncertainty around the extent of the disruption caused by Covid-19 means projections about the economy are unstable.
The venture markets have a six to twelve-month lag just in terms of reset, while experts predict a possibility of a normal market environment in six months following the washout of problems.
The world is in the phase of weak men and is on the verge of an economic collapse, recession, or depression due to the possibility of losing the petrol dollar and the current political and economic state of Russia, Iran, and China.