The last time the US economy was reporting numbers as good as it is today, I was a freshman at the university--1969. It is often said when you ascend a mountain, the next thing you must do is descend the mountain.

In the late 1920's, certainly a simpler time than today, common opinion dictated the stock market, and the economy, would rise forever. That was quickly proven wrong in a very sudden change of attitude in October 1929. And that is all it was--a change in attitude. Franklin Roosevelt got it right in his inaugural speech in 1933 when he said, "All we have to fear is fear itself." But that phrase did not shake the fear, it lasted many more years.

I am not here to say the economy, or your business, is going to fall off the cliff tomorrow. Keep in mind, even in the 1930's, when unemployment reached 25%, that meant employment was at 75%. Some businesses positively thrived in the 1930's--Hollywood being one of them (who else offered you a 2-hour escape from your miseries on a Saturday afternoon for only a nickel?). Those nickels added up.

What I am saying is this--the prudent manager or executive is watching out for all possibilities. You don't want to miss an advantage if conditions continue to be great or even further improve, but on the other hand you want to be prepared to put on the brakes, or reverse, propellers should a problem suddenly appear on the horizon.

Today's economy may be more perilous for the executive than at any time since I was a freshman at the university, for you must be diligent and watchful for both ups and downs. When you are in the trough and the only was is up, your guidance for your team is clearer than it is today.

Be prudent. Be watchful. These times require the highest management skills available.

Jim Thompson is CEO of Paperitalo Publications.