Morning Folks!!
No question that business sucks everywhere. I talked to hundreds of merchants in the last 2 weeks in Europe and they all said it was not good. Yesterday at the Vatican there were people everywhere, but only a fraction of the usual crowd. The store owners were doing little business.
Then we went to look for some shoes. I saw a brand on the way here and I liked the look. So when I passed the Hogan Shoe Store I was excited. But the 6 Foot 5 inch door man would not let me in. I had to get in line behind 10 others. I had to wait 10 minutes to get in. The place was packed. The place was doing real business. Everyone was buying and everyone was walking out with big bags of shoes. It was not prime time either. It was 7:30 on Saturday night. Wonder what it was like at 3PM?? They closed the store and it was still wall to wall. Excitement creates sales. This place was exciting. The energy level was off the chart. They had sizzle AND the steak. A rare combo.
Recession? Depression? For many yes, but for Hogan, selling $300-$500 sneakers and walking shoes, business could not be much better. Why is this important? Because it proves that when you have products consumers want, no matter the times, they sell. Period.
I wrote before about the recession of the late 1970’s. It was much worse than now. Opportunities were much less. It was a different era. But General Motors came out with a new spiffy Camaro and Firebird and THAT was what ended the recession. People flocked to the dealers and bought those suckers for years. People buy what they want no matter what. So stop teasing us with 'Concept cars' and start making DREAMS instead of metal with 4 wheels. Morons are in charge and THAT is the reason we are here.
Look at Apple. If they announce a new iPhone is coming out, the line will be hours long. Recession? What recession? Maybe a recession in exciting new things to buy. Maybe a recession in other areas. But the best way to get out of a recession is exciting new products that people want to buy. That is the secret. They can have all the stimulus they want, but nothing trumps things that people want.
So there is a lesson here. Is Twitter having a recession? Facebook? Apple? Hogan? There numbers may have been better if times were good, but they are all doing one hell of a job.
Btw, notice many signs missing? Like the ones that won’t allow you to bring a drink in the store? Amazing how a good recession can make silly rules go away. Right now anything goes because many are getting to the desperation stage. I was waiting for somebody to throw me out or warn me not to do this or that. Never happened. It’s a buyers market and if you are a buyer it sure is a lot of fun.
The point of each of these posts is to show the dire situation we are in on one hand and finding the silver lining on the other. If you are reading this, I am telling you that times have NEVER BEEN BETTER to do business. To make business. To share ideas and take risk. NEVER better. But for those that are trapped in a bunker mentality, they will surely pay a price IF they survive. It’s just a tale of two minds. Two outlooks. Two approaches. This is a time to steam roll the competition. To put folks out of business. To buy their business. This is the time. Folks it does not get better than this. Talent is out of work and available for the first time in some 20 years. That alone makes for a great opportunity to start and build companies. This is a great time to approach companies that last year would have laughed in your face and not given you the time of day. This is the time like no other. It may even get better. A bad summer is a GREAT thing. Many merchants are holding on for the summer season, if that does not materialize, it is over for many of them. The rest are waiting for the Fall and Christmas seasons. Again, if it does not materialize, it is going to be a carnage the likes of which none of us have ever seen.
Many can hold on through 2009, but if 2010 comes and we are still in this mess, it is over for them as well. But Hogan, Apple and companies that produce what people want, will survive, thrive and probably expand by buying weaker companies that they can transform.
Have a GREAT Day!
Rick Schwartz
jeff
Rick,
Your summations are always point on. I appreciate the way that you share a books worth of knowledge in a single blog post. I remember a statement on your (I think) erealestate.com website back in 1999/2000 that said something to this effect…”the value of a click is directly proportionate to the value of the product or service thay you’re offering”. That statement means more today than ever before. Thank for dropping knowledge….it’s appreciated.
Dominik Mueller
Recessions are temporary and although they cause pain in the short run, there are usually periods of exceptional growth after recessions and the overall long-term growth of the economy goes nowhere but up.
If you look at a 100-year chart of the United States’ economic growth, for example, the slumps are so tiny compared to the economy’s upward movement that it’s quite difficult to spot most recessions.
This is even more evident when looking at some European countries like Germany whose economies were destroyed during the first and second world war and which were also seriously affected by the 1929 crash in the US. If you look at the countries’ GDP of today, it is basically the same or even higher as if there had never been a recession or depression in that 100-year period.
Realizing this fact certainly helps to focus on business rather than lament about the current arduousness. The recession will be over and it will be followed by a period of economic growth that you can benefit from by setting the course for your future success today.
Companies with good products and that are run by good managers, just like the examples you mentioned in your post, do relatively well during recessions. Just imagine the business they’ll be doing once the recession is over!
Anunt
Sorry Rick, Apple might be doing good…but it’s time to short AAPL stock from it’s current price of $130. It’s going down!!!