[QQ]As we go to press, the Dow Jones Industrial Average has momentarily punctured the mystical 10,000 point barrier, and we’re feeling slightly giddy. One Wall Street analyst claimed last month that “there is a widespread belief that we’re in the best of all possible worlds.” Another stated: “The bull market is not over. Bull markets end when fundamentals erode…but we don’t have that problem right now, happily.” Welcome to Wonderland, Alice.[QQ] Alice, meet Gordon. Chancellor Brown’s upbeat Budget also dispelled fears of recession in the UK and the likelihood of negative growth certainly looks to have receded (see page 26). True, Brown’s third Budget was one of give and take, but his outlook is certainly destined to generate a feel-good factor.[QQ] However, the world is a fast-moving place, and there is always a risk that things might turn sour. US consumers are largely shouldering the burden of keeping the world economy off the critical list, and further shocks from any number of places around the globe could change the outlook drastically. (We’ll ignore the fact that one of the reasons for high consumer confidence in the States is the feeling of wealth generated by inflated savings portfolios boosted by the high stock market – which in turn is supported by corporate earnings underpinned by consumer confidence.)[QQ] More worryingly, last year was the first on record when Warren Buffett’s Berkshire Hathaway investment vehicle under-performed the S&P500. Buffett is a long-term player – he doesn’t buy and sell shares for a quick buck.[QQ] He is also one of the most successful investors of the past few decades and has seen his fair share of bulls and bears – and recessions. So when Buffett has cash holdings of around $9bn, it is worth pausing for thought.[QQ] The point is that we cannot expect to base all our strategies on the news today. Things look good at the moment, but wise FDs always make sure their companies are ready for the worst. Thankfully, business has tended to be prudent in recent years anyway. As Murphy’s 13th law of combat states: “If an attack is going well, it’s probably an ambush.” So let’s be ready – just in case.