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Thursday, 11 August 2011

Sorting The Wheat From The Chaff

Read an interesting article this week that basically had two simple points to make.
Firstly, the US financial rating downgrade needs to be put into perspective. The US has been downgraded from very very very very safe to very very very safe. The dramatic drop on financial markets has been followed by a bounce back that suggests things probably aren't as bad as first thought.

Secondly, at least one good result from a financial shuffle-up is that it sorts the wheat from the chaff. The weak tend to fall aside and the strong survive. Many retailers will not survive these tough times but those that do will be stronger going forward. We are putting our money on QVM traders being in the survival group. We have the flexibility to adjust to change and despite our protests about rent levels we are better off than retailers in most other areas.

We have put a simplified view to two very complicated issues but sometimes it pays to take a look from a different direction.