I read today on Crunchgear blog that Sony’s profit dropped 95% for the fourth quarter of last year (compared to the same period the year before.)  They went from 200 billion yen profit in 2007 to 10 billion in 2008.  Sounds like someone might be falling on the sword over this one.  But the point is not Sony.  Sony will survive.  We’ve seen Japanese companies blindsided before, and they always seem to bounce right back.  Why?  Because they have a culture that prepares for the rainy day.

The law of averages dictates that no matter how good it is right now, you’d better squirrel a little away for a rainy day, because this boon can’t last.  Fortunately, the opposite is also true:  no matter how bad it is today, it won’t always be this way because this bust can’t last (which brings me a lot of peace in times like we face now.)  So when times are flush, we shore up our defenses against a time when it’s not.  We fall back onto our stored resources and capital and ride out the hard times.  Then when things get good again, we replenish our resources to ride out the next one, and so on.

The problem comes when we think this boon is going to last forever and we spend ourselves silly (like GM did,) only to greet the bust with nothing in our reserves (like GM did.)  That’s when you wish you’d have prepared for the rainy day.  My mom used to tell me when I was in grade school that I would never be caught unawares if I prepared for the rainy day.  I’d say that’s still good advice.