I’ve been watching and reading CNBC, Bloomberg, New York Times, Paul Kedrosky and everything else I can get my eyes on.  And I think I’ve figured it out!!  NOBODY knows what’s going to happen with the economy.  It’s a very unsettling time.  I actually feel like I’m staying up to date with developments of the bailout, the elections and the extreme depth of the problems the world faces as a result, but they’re not providing me with any conclusions.

I do, however, have two fundamental beliefs:

1. The economy will recover at some point (1-5 years)
2. Investors make the most money when they buy low and sell high.

So am I making is this just too simple?  Is the “Buy low and sell high” doctrine just too obvious to really work?  With the dow closing at 9447 today, I think we can all agree, that we’re in a buyers market.  Take Warren Buffet and JP Morgan for example.  A New York Times article, Like J.P. Morgan, Warren E. Buffett Braves a Crisis, calls Warren a “Profitable Patriot”.  The biggest fortunes in the world’s history have been made in times like these. But investors are also human, and fear does often override this basic common sense logic.  The smartest investors are the ones who can put their fears aside, and invest long in companies now, when valuations are low.  By the time these companies are ready for a liquidation event, the markets will have returned.  I still find it very puzzling how some long term investors (like Angels and VCs investing in private startups) make investment decisions based on short term indicators.  Ron Conway is one of the more respected Angel investors, and I take the message that he’s sending out to entrepreneurs as a pragmatic warning of my very point.

“I would tell (entrepreneurs) to keep their day job until they got one year of funding, and if they couldn’t get that, then they’re not meant to start that company right now…. My advice to (start ups that don’t have a year’s worth of money in the bank) would be to raise money by reducing your own spending. If you can’t raise more money, you have to cut costs. And that’s what I’m harping on to my companies.”

Vancouver’s own Lyal Avery had some pretty insightful words to say in the comments:

“With all respect to Mr. Conway, I think it’s dangerous advice to tell people behind startups to “not quit their day job.” In my opinion, economic downturns are the perfect time to get started - the conditions are better than during a boom. Labour is cheap, distractions are minimized, and a lack of over-abundant investment means the business models produced can weather future storms. “

There are incubator-style companies and funds springing up all over the world. Y Combinator in Cambridge and the Bay Area, and TechStars in Boulder are the ones that we at Bootup identify with most strongly. And yes, we don’t like to use the term incubator since previous versions had very different models than today’s crop.

This past Thursday, Zac Boon came by to visit us. He’s with McLean Watson Capital, out of Toronto, Ottawa, and Singapore, and also runs Thymos Capital, based in Singapore. Their “who we are” sounds pretty familiar — it’s great to find similar concepts springing up:

a private business incubator which focuses on mentoring, seeding and creating successful Interactive Digital Media startups in Singapore with unique competitive advantages – sustainable businesses that are fundamentally sound and financially viable when they leave our incubation process.

Zac was on his way to the Bay Area with one of his mentored founders, and stopped off in Vancouver to see what’s happening here. We talked a bit about the challenges of smaller environments — Singapore is of course a city state, with about 4.5M people, and all of BC is about 4.4M people. This is definitely an area where we’ll keep talking — would it make sense to work with our governments to sponsor some cross pollination between BC and Singapore? I think so, so it’s time for me to go bug some of my contacts in the Ministry of Economic Development…

On the other side of the world, we’ve been watching SeedCamp in London, England. Chris Comella from BuzzPal did a great “blink” reaction on his top SeedCamp picks, and will also be heading to London to hang out with the SeedCampers even though he didn’t get picked. That’s initiative!

While I’m talking about Europe, a pointer to ClipperZ is in order — the team is another “friend of Bootup” that I’ve kept a connection with for years. They have tools for building “zero knowledge” web applications that apply to security and identity online. Their updated intro to zero knowledge web apps and ClipperZ is on SlideShare.