Opportunities During Financial Downturns

On the morning of April 18, 1906, a massive earthquake hit San Francisco and the ensuing fires reduced the many of the city’s large banks to ashes. As the flames neared Amadeo Peter Giannini’s small bank, he spirited $80,000 in coins out of town. He loaded the money on wagons and hid it under crates of oranges before steering past gangs of thugs and looters in the streets.

As other banks struggled to recover, Giannini made headlines by setting up a makeshift bank on a North Beach wharf. He employed an uncommon banking practice by extending loans to hard-pressed residents and small borrowers which helped revive the city. Giannini expanded his operation to cities across the nation and, in 1930, changed his bank’s name to Bank of America.

Years ago, CEO of Berkshire Hathaway Warren Buffet said: “Try to be fearful when others are greedy and greedy only when others are fearful.” While sudden and dramatic crises like the San Francisco fire can shake the financial world, there are opportunities that arise. It’s people like Amadeo Peter Giannini who see opportunities during these downturns and make them work for themselves and others.

Bear markets, like the one we are currently facing, are facts of life. They can be hard to anticipate and difficult to judge how long they will last. One thing is certain: they create opportunities. History shows the market always rebounds after a decline, and that some of the best businesses will rise while others fall. GE, IBM, and Apple are a few of the many notable companies started during a recession.

Southeastern Trust is committed to providing quality service and support to our clients, even when market conditions are challenging. Click here to download our latest investor insights, which looks at bear market outcomes.