Sounds a no-brainer to invest during troughs and reap dividends during peaks?

There is enough historical and mathematical evidence to prove that return on investment is maximized when the investment is made at the troughs of the business cycles instead of at the peaks. Mathematically, this must sound fairly obvious considering that returns come from business benefits that are directly or indirectly a function of the business volume.

Why then, do some parts of the investor and business leadership community get overly obsessed with bottom-line improvement in a downturn? When there is a dire need to generate cash on a day-to-day (ok, that was an overkill, read short-term) basis because of an intent to cash-out at the earliest or you’ve already made the mistake of investing at a peak, you are likely to have no choice but to focus on the bottom-line. The latter is reality that you can live with if you have a long-term vision and a sound strategy for volume uptake beyond the market on a revival but the former could be a real danger if the underlying reason is that you have run out of ideas to improve volumes beyond the market even on revival.

You would be surprised just how many people and organizations demonstrate this behavior and what their underlying reasons are. I recommend trying this hypothesis out in your own ecosystem or with businesses you watch closely and see the results for yourself.