How to Profit in the Post-Lehman Era

Robert Hsu, September 15, 2009

In this Issue:

Bouncing Back from the Lehman Brothers Collapse
The Right Course of Action
Profitable Opportunities in Asia's Recovering Economies
Profiting from Asia's Rebound
A Growing E-Commerce Business

Bouncing Back from the Lehman Brothers Collapse

Today marks the one-year anniversary of an event that few investors will celebrate -- the collapse of Lehman Brothers. This day last year was probably the pinnacle of the global financial crisis, truly proving that no institution is too big to fail.

In the days and weeks that followed Lehman Brothers' collapse, other financial institutions also admitted failure and faced bankruptcy, including AIG, Merrill Lynch, Fannie Mae and Freddie Mac -- just to name a few. In some cases, the government or other financial institutions like Bank of America stepped in to bail them out, while others simply collapsed like Lehman Brothers.

Overall, though, Lehman Brothers' failure started a domino effect -- and the bankruptcy of many major financial institutions was simply catastrophic for the global stock markets. Not one was spared.

From September 15, 2008 to the end of 2008, global stock markets sold off hard…

Russia's RTSI Index plunged 53%.
India's Sensex Index plummeted 31%.
The S&P 500 dropped 28%.
Europe's FTSE fell 18%
China's A-Share Market in Shanghai lost 13%

In an attempt to stop the bleeding, most country's central banks injected liquidity into the markets. But while this was necessary, there were greater risks facing the world's economies and the global economy as a whole -- more bank failures and an economic slowdown.

That's why I told my China Strategy subscribers that there was one action that most economies needed to take: Follow China's example.

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