Its not a V dip

Its official we are not suffering the V shaped recession but if anything we could be heading for a W recession.Latest punditry from the CEO of Shirlaws has worked out a model which times the cycle where the economy is compared to other finance market events.

The conclusion is that we are in the flat part of the unusually shaped W , where the upturned v in the middle of the W has a table top. At the end of the flat period we then go into a dip followed by a period of growth, perhaps for a as many as 5 years

Hope you are still with me , as there seems to be a great deal of sense in this prediction.The key for businesses however , is that they need to be in a state of readiness for the upturn , rather than still being in the cave waiting for the storm to blow over.

The fact that markets are starting to recover has no bearing on the fact that business is out of step with the fund management cycles which actually started in March 2008.Markets are saying we are at the end of the first part of recession , and business is still cutting cost rather than investing so future growth is unlikely for a while.

My own view is that businesses in any case should be measuring performance based on
use of cash to generate profits and cutting waste to build for the future . That way they will be ready for the next push. Reality is that businesses should be doing that anyway.

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