One thing in the book was particularly interesting. Guillaume explained that consumers don't make rational decisions when it comes down to buying a brand. There are always emotions involved. In my opinion, this is something that a lot of clients tend to forget. I've done an economics study myself for one year and every attempt at creative thinking is perceived as being silly. Brand managers are taught to judge advertising on a rational level, while brands are actually chosen on an emotional level.
I want to take this theory even to a bigger scale. Take a look at the stock market of the last few months. We tend to think that this is a market where rational decisions are playing a major part, but even with buying stocks there's emotion involved. In the recent financial crisis this has become even more clear. I've never seen such big swings from depression to blind optimism. One day investors are about to hang themselves and the other day everybody is delighted again because the government pumps money into the economy (money that doesn't even exist).
I've been in the middle of the last recession. I think that the one we're in now is going to be different. The recession from 2001 lasted for a couple of years and the economy was in a deep ditch where it slowly crawled out. Now, the recession seems to induce a chain reaction of emotions. Governments act immediately, stock markets react immediately and businesses go from one extreme to the other. I think this will be a recession of extremes. It's not only a financial rollercoaster, but also an emotional rollercoaster. As a result every time when we think the biggest financial threat is gone, another surprise lurks around the corner.
Surprises like the 50 billion (!) financial fraud of Bernie Madoff. Bankers and investors all over the world trusted their money in his investors fund. The most surprising thing is that nobody could see this coming. All the banks were amazed by the steady returns on offer: about 10% to 15 % a year. So that was based on a rational decision. Only good intuition will tell you: there's something fishy about an investment fund that's going so well. But Madoff seems to have such a good name in the financial world that even the most rational thinkers in the world blindly followed their financial leader. Their hero. It proves that we're only human. And that we can expect anything these coming years. There's a tough time coming up. But whatever happens, it will be jaw dropping and exciting as hell.