Fasten Your Seatbelts... The big "R" is on the way...

Every tragedy begins with a good story.

The most famous of all sites for prophecies and spiritual guidance was the Temple of Apollo at Delphi. No other oracle in Greece equaled Delphi.

Pythia was the name of the high priestess of the Temple of Apollo at Delphi. She specifically served as its oracle and was known as the Oracle of Delphi. 

It is told that Emperor Nero consulted the Pythia, only to have the oracle accuse him of murdering his mother. As described by Philostratus, "the power of the god came upon the Pythia, her bosom heaved and she panted. Her face became red and then was drained of color. Her limbs jerked and quivered and her eyes blazed. Saliva frothed on her lips, her hair stiffened and she snatched off her headband. She seemed possessed by some entity." Then she screamed, "Your presence defiles me. Begone matricide! Beware of 73."

Enraged at her refusal to honor him, Nero had the priestess and the attending priests buried alive. Nero thought he would have a long reign and die at 73. Instead, his reign came to a short end after a revolt by Galba who was 73 years of age at the time.

You may know the future, but you can't do anything to stop it to happen.

Nowadays, Finance Professionals have our own Oracle devices (models we call them); tools like projections, outlooks, forecasts, forward p/e ratios, scenario planning.

If you pay close attention to the chart on the top of this article, you will notice a type of "roller coaster" pattern. The gray areas represents periods in which economic recessions happened between each cycle.

Every time the pattern is downward, it predicts (usually) that we are months away from an economic recession. Some professionals state that it could take 12 to 24 months (Barrons, 2022).

We said at the beginning that every tragedy begins with a good story.

Every Recession begins with a good story as well.

Inflation, wars, potential food shortage, gas (energy) rationalization are some of the stories that we are reading and watching every day and seems to enhance our fears for the big "R".

You may know the future, but you can't do anything to stop it to happen.

But...

You can prepare yourself for it.

Engraved at Delphi were two of man's great moral precepts--"Know thyself" and "Nothing to excess."

First be conscious of what are the parts of your financial status that may be badly hurt in case of a global recession. "Know thyself" and start to reduce those weaknesses (leverage is one that is key).

Second: don't panic. It is normal that we experience cycles like these (we had before and we will in the future, trust me). But don't get rid of quality assets or start worrying about all the consequences of the "possible" economic downturn.

Nothing in excess.

I will finish with a plea: don't kill the oracle (I mean "don't kill me") for bringing this oracle.

It did nothing for Nero.

Be prepared and remember: "This too shall pass".