The last few days I have heard from different sources about the comments of a trader and public speaker named Alessio Rastani. His latest blog post (http://www.leadingtrader.com/09/global-recession-why-i-pray-for-another-recession) is named " Global Recession | Why I pray for another recession ". In a display of what seems to be brutal honesty, Mr. Rastani helps balance out the subtle lies of our politicians and leaders who try to sell us promises of quick solutions without any willingness to make the unpopular and tough decisions that are needed to turn the system around.
The title itself will surely give chills to the core of anyone who has lost their job or experienced the true hardships of a recession. His blog-post however reveals that the title is only a small part of the views Mr. Rastani is trying to convey.
Mr. Rastani's point seems to be that a recession is good for anyone that is prepared for it. There has always been ways to counter the potential losses incurred from a global recession. These options range from the more simple to the advanced, but in today's world the information about them is more accessible than ever. For instance you can learn the basics of short-selling through a simple YouTube video (http://www.youtube.com/watch?v=fmAcDWZwTw4). There are numerous blogs and other resources describing these concepts and the practical application of those concepts.
Mr. Rastani is describing the volatility or "Elevator" of a falling market VS "The staircase" that illustrates the slow increase in stock value in a bull market. The markets will demonstrate conditions that are ideal for many trading strategies. It seems to me that Mr. Rastani is indeed dreaming of the "perfect market conditions" that he feels accompany a recession. The harsh and negative impact on average-Joes lives through lost jobs or defaulting mortgages etc. are not part of his dream.
The mentality displayed by Mr. Rastani's statement can be said to exist in many traders. But the important psychological aspects of being a professional trader requires you to distance yourself from a lot of things that we need to pay attention too in normal social settings. I have no idea if Mr. Rastani has strongly developed those sides of himself, but I do recognize some of his views from my own trading mentality. Most people don't have the background to differentiate between trading mentality and personality traits. I think in his latest contact with the media, Mr. Rastani has been portrayed as if the two were one and the same. Some traders live their life like they trade, but I think the key to a long life both in trading and in general is to find a way to clearly separate the two, Work and Private life.
As for the recession, my advice is to read Mr. Rastani's blog and some of the many other sources of information both objective and subjective. Try to shape a vision of what the worst-case scenario is for you and your assets. Are there ways you can improve on that situation? Talk to your broker or friends in finance for more concrete ways to take proactive action against volatile markets and a possible recession. I for one would not be surprised by a recession although I feel that there is no certainty to the markets reacting in the way Mr. Rastani dreams they will. I am positioned on the bearish side for now, but I am not risking everything if the markets should recover. The current rally and positive view on the steps taken in Europe is to me a premature reaction to some actions or promise of action that is not even taken yet. Even as the German Bundestag approve reforms, we do not know the effect or the true cost of this before long into the future. I remain cautious and I think everyone at this point has reason to be nervous either they are bearish or bullish. The agility and flexibility in my strategy are two key points to my trust in it.