Boom! How to become rich in this recession?

It's a little known fact that more millionaires were made during The Great Depression than in any other time in U.S. history.

There is one golden nugget contained in this history lesson that can enable you to make a lot of money when the UK is in a recession (like right now) because a recession is exactly the same thing as a depression except it doesn't last as long and the economic damage is not as severe.

You should know that the Great Depression actually began a few years in advance of the 1929 stock market crash and lasted until World War II brought the US out of the Depression.

During the years before 1929, as greater and greater amounts of credit was extended to individuals and businesses the economy was tipping over the edge from available cash to excessive amounts of credit debt. When the amount of extended credit reached a critical mass, and businesses failed to pay the credit bills, the companies crashed (the 1929 stock market crash.) Because employees lost their jobs they could not pay their credit debts and the housing market and banking industries crashed.

The many business enterprises that changed hands during the depression by people with liquid cash are too numerous to mention, but due to the war effort, those with liquid cash who bought land, homes, companies, or invested in the shares of the companies that produced products that were in demand by the government for the war effort made millions. The industries included such products as:

1. Steel, iron, copper, and aluminum
   
2. Communications equipment and replacement parts
3. Tanks, boats, aircraft, vehicles and parts for these
   
4. Ammunition and weapons
   
5. Boots, clothing, belts, helmets, caps, backpacks, hats, blankets, tents and cots (and the textiles to make them)
   
6. Storage and shipping containers
   
7. Shipping, truck and railway transportation
   
8. Petroleum products and fuels and stock in iol wells (the Texas oil boom was a biggie!)

A handful of the better known companies that were bought during that period were: Ericsson,Reynolds Metals, John Deere, Douglas Aircraft and even the Goudy Gum Company

So what should you do now?

Now, like then presents an opportunity. I personally feel in the next 6-12 months there will be plenty of opportunities for those that have a liquid asset base (i.e. cash). Those with cash and an appetite for risk will find some rich pickings. Sectors to look at include:

1. Property - UK and abroad, still falling but it will bottom out soon...start looking for some bargains!
2. Retail - trouble on the high street now, but look for the labels that are re-positioning themselves in the market place. Many such shares are really at record lows.
3. Banking - a tough one to call, but potentially huge, be careful to assess the capital/loan ratios before you invest
4. Healthcare - people still get ill and need their teeth done. So healthcare still remains a firm favourite of mine...whether you run a healthcare business or invest in healthcare shares.
5. Any businesses that are either catering to the CHEAP end of the spectrum or at the BEST end of the spectrum. Focusing on such extremes will do well. It is the middle ground that is hurting, so best to focus on CHEAP or BEST! For example i recently attended an art exhibition where 90% of the art sold in just 48 hours...and it was not cheap! Fine wines look another interesting prospect, they have dropped a lot recently and could yield big potentials...i will be looking in to this one further!

Just a few ideas.....just start looking and taking some action!