This will be a quick post, but I could not go without sitting down and writing it for the blog. I have been in London, England for the past week on some business and during the evenings I did a lot of walking around the major tourist and shopping areas. It was very hard not to notice, but if there is some sort of global recession going on then no one told that to the millions of travelers, Londoners, and especially shoppers. Every store I went into there were not only many people looking around, there were often queues at the checkouts that were 10 – 20 deep.[ad#tdg-embedded]
These were not just the knick-knack “I Love London” type of merchandise people were buying. On two separate occasions I went into the Louis Vuitton (real high-end bags and purses) I witnessed people spending crazy amounts of money on their products. I am talking about $500 wallets to all the way to $30,000 bags here. Same at the Burberry store and the Apple store (which was the busiest Apple store I have seen throughout the world).
Being the investment geek that I am, I thought to myself about this on my portfolio. Perhaps things are getting better out there – people are feeling more comfortable and willing to drop some big coin. Or perhaps, this is just more of the same crap that got many people in trouble in the first place. These items are being bought on credit with no thought for the future. To help validate this, I had a chat with the hotel I was staying at as well as one of the staff at the Louis Vuitton store. Their response was the same – the spending levels and busyness of London I was seeing now was way less than they usually experience. Things are down. My additional interpretation is that the places I was going to cater to wealthy people, and often these people are not hurt as much by recessions. They still had their good paying jobs to support the big ticket items (be it via credit).
As an investor, I am going to still be cautious. I am going to pay down my house debt, aggressively funnel money to my portfolio and enjoy the fact that I am fortunate enough to have a good paying job. Things turn very quickly (just look at the past 6 months) and it is best to be prepared!Google+