By Tom Bradley

More and more commentators and experts are acknowledging that the world has changed. The framework for the future that Pimco’s Bill Gross laid out recently – namely de-levering, de-globalization and re-regulation – encapsulates what I’m reading every day, as does his resulting caution.

I guess it’s my contrarian blood, but I do think we have to be careful going too far in declaring that the world has changed. As the pronouncements get bigger, more confident and extend further into the future, it is more likely they will be wrong.

No doubt, this downturn is a biggie. It’s the most severe one any of us have seen and will cause serious dislocation. And de-levering will take time. Steps have been taken to address the problems in the capital markets (margin calls made, hedge fund lending reduced, equity capital raised), but consumers have a long way to go to get their affairs in order and governments of course are going the wrong way.

But as the list of concerns expands and the conviction builds (which is a trend I’ve definitely noticed), it feels like we’re piling on. It’s easy to come up with more doom and gloom, but difficult and less topical to seek out the balancing items.

So here are my bold, confident predictions of what’s on the other side of the ‘world has changed’ ledger.

First, I can say without hesitation that not all of the grand pronouncements are going to come true.

Second, in the new world, we will be surprised at how big the gains will be for the strong, prudent players. Well-positioned countries, companies and individuals are going to move up the ladder, maybe a few rungs this time. We’ve focused on the weak so far, which is natural, but the strong will also prove to be a noteworthy feature of this cycle.

This recession will accelerate the shift of economic power to the developing world. Many emerging market countries are sporting a current account surplus and are better financed than in previous crises. I’m not suggesting that they’re ‘decoupled’ from the worldwide recession, but they may weather the storm better and come roaring out the other side. It could be a seminal moment for some of the Asian countries in particular. Canada has a chance to be in that category, although the determination of the Federal government to subsidize the past as opposed to invest in the future weakens our case.

With regard to companies we invest in, think about the opportunity that the Canadian banks now have in front of them. The environment for their basic banking services, both for retail and corporate customers (yes, they still do that), is fabulous. And with a few exceptions, their global competitors are reliant on government funding and unable to do acquisitions. Unless our big five experience further unexpected blowups, their world standing is on the rise.

Individuals with confidence, discipline and a job (importantly) stand to gain as well. Goods and services will be marked down in price and investment opportunities (stocks, real estate, and businesses) will be plentiful. It is a buyers’ market.

And finally, I remain confident that this will be a cycle like all others. The downside will be bad and may last a while, but the excesses will be purged and the next up cycle will occur. The longer and deeper we go, the more powerful the other side will be.

Stocks have halved in price and corporate bonds are trading at depression-like valuations. The markets are telling us the world has changed. But not everyone will be impacted the same way and not all of it will be bad. Indeed, good news and opportunity will become a bigger part of our changing world as we move forward from this point.