Business leaders and entrepreneurs often share their words of wisdom, helping many people who are either unmotivated or too scared to start their journey. In the LiveMint Quote of the Day, we focus on a quote from Stephen A. Schwarzman, co-founder and CEO of Blackstone Group, one of the world’s largest investment firms.
“I’ve experienced periods of illiquidity before. Asset prices fall. The economy slows or even goes into recession. Then the cycle starts again. We buy at lower prices with less leverage.”
Here’s what that means
In this quote, Schwarzman suggests that he has experienced many phases throughout his life where money has become scarce, businesses have slowed down, and the prices of things such as companies or stocks have also seen declines. According to him, it is at this time that many people start to worry because the economy is also likely to slip into recession. However, things eventually improve and the cycle starts again.
He emphasizes that hard times in any economy are normal and that they don’t last forever.
Schwarzman’s quote highlights an inescapable truth about global markets: economic cycles are inevitable. Periods of massive liquidity and rising asset prices are often followed by a phase in which capital tightens, growth slows and confidence weakens.
Such a phase can shake businesses and investors, as falling valuations and limited access to credit can create pressure across sectors. However, Blackstone’s CEO experience shows that these downturns and economic cycles often reflect our perspective. For positive-minded investors, such a period could represent an opportunity. For seasoned investors who are financially strong, such bad times can turn out to be good opportunities. When prices are low, valuable assets can be bought back cheaply compared to the overpriced markup during boom times. He further suggests that by using less borrowed money, they can reduce risk if similar conditions persist. While for those who are easily swayed by such downturns, exiting the game or panicking takes center stage.
The shift creates a window for disciplined investors to enter.
Schwarzman’s quote serves as a timeless principle, one of the basic principles of investing. At a time marked by global uncertainty, declines cannot be seen as the end of the story. For those willing and able to act prudently, these transitions can mark the beginning of another phase of growth.
