Reading The Signs Of An Impending Market Crash and What It Means For Singapore Businesses - Should You Cut Or Double Down Your Marketing

When the kopitiam uncle and the Grab driver are both blowing smoke up your arse about stocks going “to the moon”, it;s usually the first sign that the moon is actually just a very bright lamp post and that they had too many bottles of Tiger at the kopitiam.

History shows us that the big crashes will never arrive politely. They tend to creep in quietly, tap you on the shoulder, then hantam your entire portfolio like a mugger before you can even blink.

If you have been paying extra attention lately, you might even have noticed a few hints that the global economy is not exactly coming for a happy ending. These signs are eerily familiar and very predictable, almost to point of looking boring, because we have seen them appear time and time again before every major crash.

But just like how some people still fall for trading guru’s “hot tip” WhatsApp groups, many business owners still choose to ignore the warnings.

It’s simply human nature to ignore warnings

Whenever the global economy starts behaving strangely, people always hope it is “just a small correction”, but sometimes it is not a correction at all. Sometimes it is like the opening scene of a disaster movie such as 2012, the kind that makes business owners stare at their bank accounts like they are reading bad news from the doctor at SGH.

If you look closely right now, these signals are starting to appear again and they are really starting to look suspiciously similar to the months just before the Great Depression of 1929, one of the biggest economic WTF’s in human history. Back then, people also believed everything would be fine. The sun would keep shining, birds are still chirping, stock prices were high, credit was cheap, investors felt invincible, and newspapers kept printing happy stories for the blissfully unaware public.

Sounds familiar, right?

So let’s stroll through memory lane, through all the classic warning signs, because like what George Santayana famously said, ‘Those who cannot remember the past are condemned to repeat it.’

We’ll look into what a new crash would mean for Singapore, the implications for some industries like security, FNB and banks, what steps everyone should take to protect themselves, and finally, whether businesses should continue marketing or simple throw their budget into a safe and hope for the best.

Drawing parallels with the Crash of 1929

The patterns of financial madness are not original. They repeat themselves, like a long running mandarin TV drama on Channel 8. The Great Depression had already given us all the signs, but people still wilfully ignore them because human beings think every new bubble is ‘special’, much like a newborn baby.

But no, it is almost always still the same baby, but with a different hairstyle.

1. Everyone still believes nothing can go wrong

In 1929, economists actually said the stock market had reached a “permanent high plateau”. They (stupidly) thought it could never fall again. Today, people are again saying dumb things like ‘AI will be a gamechanger for the economy’, or ‘tech stocks will always rise’. Yeah, right. History teaches us one lesson. Whenever people start getting mass delusions, the universe starts sharpening its parang. And it is a very, very, big parang.

2. Prices rise faster than common sense

Before the 1929 crash, companies with weak earnings had sky high valuations. Companies became the darling of the market even though profits were not growing fast enough to justify the madness. Today we see the exact same pattern of insanity. Companies with no profits trade at unbelievable prices, fuelled by ‘the narrative’, the hype and blind hope. PE’s are insanely, astronomically high (PLTR PE 416 / KTOS 1,075) and people are still wilfully complacent.

What is PE? To explain it simply, if you buy a chicken rice stall today and it earns $10,000 a year, and you pay $100,000 for it, you are basically paying 10 times its yearly earnings.

That means its P/E is 10 and that it will take 10 years of earnings to make back what you paid (assuming the business never grows or shrinks). Now, think about a company that has a PE that is hundreds or even a thousand times of its earnings. That will mean it will take 416 or even 1,075 YEARS to earn back what investors paid for its stock.

Does this sound ridiculous to you?

When the hard rock of mathematical reality finally catches up with all the delusions and misguided hope, it will not be gentle and you had better pray you’ve got a good parachute.

3. Smart money quietly escapes first

In the summer of 1929, wealthy insiders (and other assorted scumbags) sold their stocks and moved to cash and other assets, all the while telling a naive public that everything was still wonderful and ‘times have never been better’. Does that sound familiar to you? When big investors, hedge funds and assorted insiders start selling today while still smiling for the news cameras and selling snake oil, you know something is cooking and it smells really horrible, like burnt pizza left unattended too long in the oven.

4. Too much borrowing everywhere

In the 1920s, people bought stocks with money that they didn’t have. When prices dipped, banks issued margin calls, which triggered forced selling that caused even bigger drops in a cascade effect. Modern markets are no different from back then. When retail investors, the kopitiam uncle, households, companies and traders all take loans to gamble on the stock market, it only takes one really bad week to start a chain reaction that will land everyone in hot soup.

5. One small spark collapses the whole structure

In 1929, it started with small dips. Then the fear spread. Then the panic selling. Then all the lights went out and everything went down the toilet bowl. All the markets need is one tiny spark. A disappointing earnings report, a geopolitical shock, or some unexpected policy comment. Once the stampede starts, it’s all over. Remember, even a mighty lion like Mufasa died in a stampede. In this age of automated trading systems, everything will happen faster than a nuclear explosion, and the cascade effect will be just as catastrophic.

What A Crash Would Mean For Singapore Businesses

Singapore is famously stable, but even we cannot escape global sell offs. Our economy is still connected to the world. And when the world sneezes, we get the flu. Here is what a downturn would mean, for certain sectors.

Security Industry

Security contracts usually look stable, but clients will renegotiate the moment they get nervous. Budget cuts, fewer new tenders and slower project approvals will hit the industry. Big players with stronger cash buffers and deeper pockets will survive. Smaller firms living month to month will definitely feel the stress. Expect more competition, even more price wars and more “eh can give discount or not” conversations.

Food and Beverage

Sadly, FNB will always the first victim when times are tough. Just look at what happened during Covid. When wallets tighten and people start losing their jobs, Singaporeans cut their cafe brunches and after work dinners faster than you can say kopi siew dai.

Restaurants, especially those with high rents and razor thin margins, are at especially high risk. Chains with strong branding, deep pockets and efficient operations can endure, but many small shops and hawker centres will see rapidly declining footfalls. Promotions will become even more aggressive, cost cutting becomes a spectator sport and everyone prays that the customers will order higher margin drinks instead making do with iced water.

Banks and Finance

Banks tend to make money early in a downturn because interest spreads widen, but when business slow down (and it will slow down) and every father mother son starts defaulting on their loans, the mood changes like CNB switching on the lights when raiding a club. Credit approvals become stricter, risk appetite drops, and everyone becomes very serious. Banks will still survive, but customers will feel the tightening, especially SMEs trying to borrow for expansion.

Retail and Property

Lower consumer confidence and tough times means less shopping. Shopping malls will see reduced traffic. Developers delay condo launches and offer even more perks + incentives to try and get any customers. Landlords of both commercial and residential properties may also face rising vacancies as businesses fail. This is the same pattern seen during the Great Depression, when consumer spending collapsed into a black hole and thousands of businesses shut their doors.

Professional Services, Freelancers and Agencies

No question about it, this group always gets cut first in times of trouble. Businesses pause their marketing activities, delay branding work and postpone non-essential projects. Stability depends greatly on having recurring clients. Anyone living hand to mouth and relying only on project-to-project income will definitely feel the chill.

What Business Owners Can Do Right Now

Learning from the lessons of 1929 (and every crash after that), survival is all about having sufficient preparation, not just relying on prediction.

1. Strengthen your cash flow

Cash was king in back in 1929 and it remains king today. Businesses with enough cash survived the depression. Those without it drowned in the general morass of pain and suffering. Learn to cut waste, renegotiate contracts, chase late invoices and delay non critical spending.

2. Reduce risky commitments

Do not enter long leases or hire unnecessarily. The companies that collapsed in the Great Depression were often those with heavy fixed costs. Keep your operations lean.

3. Look after your core customers

Your loyal customers are your lifeboat. Keep them close. Improve service. Offer added value and communicate consistently. The businesses that survived 1929 often relied on steady repeat customers to support them through the crisis.

4. Create extra revenue streams

During the Great Depression, many businesses survived by expanding product lines, offering lower priced versions or diversifying into other revenue streams. Singapore businesses should do the same. Add services, create retainers, offer simplified packages or even explore digital channels.

5. Accept reality, not hope

Hope is not a business strategy. Hope is what people die from in 1929 when the markets fell 89 percent. Prepare for the worst, so that you do not become another cautionary tale.

Should You Cut Marketing Or Double Down?

Here is the hard, uncomfortable truth. Marketing is not automatically good or automatically wasteful. It all depends on whether your marketing actually works in the first place.

You can consider cutting your marketing if:

• it is random

• it has no strategy

• it is run by someone who “just tries a bit of everything”

• the only plan is to hope for a viral post

• you are boosting posts blindly with $10 daily budgets

Bad marketing is simply a waste of money in any economic condition. During a crash, it becomes a luxury that you cannot afford.

You can consider doubling down on marketing if:

• you have a clear strategy

• you know your audience

• you track solid results

• your campaigns bring leads and sales

• you can increase visibility while your competitors disappear and die off

This is exactly what strong companies did during the Great Depression.

While others panicked and hid, the future winners (and survivors) kept advertising. They gained market share because the noise level dropped and competition died. Singapore businesses can do the same today.

When everyone else is silent, your voice becomes louder.

Final Thoughts

Crashes do happen. They always have and they always will. They are inevitable.

The Great Depression was not caused by magic or some bomoh waving chicken feet. It was caused by simple human greed, overconfidence and denial. These same factors are appearing today if one knows where to look.

However, it is also worth noting that the Chinese word for opportunity is weiji (危机), which combines the characters for "danger" (危) and "opportunity" (机). This tells us that while a crisis is dangerous, it also presents an unprecedented chance for growth, transformation, and change.

Similarly, times of trouble also clear the battlefield.

Weak businesses fall. Strong ones adapt. Smart ones grow.

With enough preparation, discipline and strategic marketing, even small businesses in Singapore can survive and come out stronger on the other side.

Disclaimer

This article is only meant for general information and educational purposes only. It is definitely not financial advice, investment advice, legal advice or professional guidance of any kind. Every business and financial situation is different and readers should always do their own research or speak to a qualified professional before making decisions. The views and opinions expressed here are based on historical patterns, public information and general observations, and may not apply to your unique specific circumstances. The writer is not responsible for any losses, actions or decisions made based on the content of this article. Use the information at your own discretion and risk.