Headlines to the effect that the Dow
Jones and the FTSE
100 are back to the “high” of the end of 2008 rather miss the point!
Yet the news has both positive and negative significance.
The glass-half-empty is that the first half of 2009 was a
disaster in its own right – on top of the even bigger disaster of the previous
autumn. It is something to have recovered from that second disaster, but that
should not blind us to the fact that we are still behind the game.
The good news is not so much the recovery but the nature of
the recovery: it has been slow and steady, not spectacular. This is what we
need: dramatic swings, first one way and then another, are a sign of
instability, not confidence.
The really good news is that this means that the markets – after
being overvalued for years – are becoming, once again, the reliable and
realistic economic indicators they are meant to be.
This is important for those of us whose businesses are not –
yet – included in the Dow Jones or the FTSE 100.
One of our greatest challenges over the next year will be
planning in the face of continuing uncertainty.
In this respect, small business used to be able to hitch a
ride with the big boys – watching the stock markets was in effect taking
advantage of the analysts and economists employed by the major investment
houses. Part of the reason for last year’s crash was that most of those
analysts and economists were in a world of their own for several years.
Now the stock markets are once again a fairly accurate
reflection of the economy – still very cautious, and definitely unimpressed by
stimulus packages and fiscal deficits, but, on balance, positive about the