Recession starts when some companies discover the limit of how much they can push up the pricing of their products and stocks using press and advertising. As the prices up sales start reducing and revenues drop. This shows up negatively on reports, and investors, press, and consumers start panicking. This negatively affects the whole economy.
One way to recognize recession is when unrelated assets behave the same. For example: Ethereum, Tesla stock, Microsoft stock, and Apple stock are all dropping. It is impossible that all four had a problem at the same moment and therefore their drop is motivated by the general sentiment.
In such a situation it is important to recognize which assets can regain and increase value after the recession. These assets are a good investment opportunity during recession. Rate of innovation is one of the best predictors of this opportunity.
Assets of companies and projects that have continuously launched new products offering new solutions, adopted and created new technologies, and fully focused on their customers will most likely rebound and grow after the recession. Companies that did not communicate their innovation well, did not focus on customer but only on internal innovation, did not adopt new technologies, will most likely be severely damaged by the recession and might not rebound.
Innovations are always valuable because they truly change the world.
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