Monday, August 24, 2009

Taking stock; A Tale of Three Bears.

I see the economy right now as a tale of 3 bears.

The stock market is a panda bear.

The national economy your everyday black bear.

And the local economy as a 1000 pound Mama Grizzly, (URSUS HORRIBILIS) and you've just stumbled upon her two cubs.

Panda bear, cute and cuddly and living in a world of it's own.

Actually, you couldn't really call the stock market cute and cuddly, but it certainly lives in a world of it's own. I'm actually expecting the market to go up in the next quarter, and I've pulled all our IRA funds out of cash (.000000006% or something like that) and into a 'conservative' mutual fund, for Linda (Pioneer Stratagic Income Fund), and into the other funds I'm already invested in (Evergreen and Eaton Vance) for me.

The Contrarians are betting on a 10% drop in the market, so I'm going all contra--contra on their ass, and saying it will go up, at least until the end of the year. After that? I think the national economy will muddle through. (More on that in the Black bear section.) I was telling my broker, that I don't go to Vegas, so I'm getting cheap thrill by checking the stock ticker every week or so.

Yeah, yeah, Jesse, I'm a babe in the woods. But I'm hoping for a little of that "God takes care of fools and Englishmen" beginners luck.

Besides, I'm still young -- well, relatively. I can wait the decade.

The Black Bear -- leave it alone and it will leave you alone.

Usually, that is. Sometimes the bear will get kind of gnarly on you, especially if you go to bed with a sandwich in your pajamas or something.

Anyway, I believe the national economy isn't going to get much better very fast, that it will APPEAR as though things are improving. As I've pointed out several times lately, we're about to double up on the extreme drop of last September. (Remember? Lehman Brother, Merrill Lynch, AIG and John McCain flying to Washington to save us?)

I'm thinking they are going to try to avoid extreme inflation or extreme deflation, or first deflation and then inflation, or whatever -- the experts seem split on this.

Everything else -- it sucks.

Grizzly times.

Local Economy -- Holy Cow. Stay in your cabin, there are Grizzly's out there looking to feed their young.

I've got a bet that at least two local banks will go down for the count. I didn't pick the one that actually went down, and there isn't much time left in the year, so it looks like I may be buying my friend a CD of his choice.

I think the housing is so much worse than anyone knows.

And commercial, don't get me started on commercial.

A year or so ago, I counted about 10 locations on Greenwood for rent. That actually shrank to about 5 for awhile, and a couple new ones have come on. But the alarming part is the 5 who haven't rented -- for SEVERAL YEARS now. I don't think the landlords are quite willing to go down to nothing, and that's probably what it will take.

So, looking at downtown, we've managed to rent the spaces relatively quickly until now. Lots of turnover, really, 3 of the 6 spaces in the building across from me have turned over in the last 6 months or so.

But I'm concerned that we might start seeing the Greenwood phenomenon downtown over the next year or so -- spaces stay vacant much longer because rents refuse to drop.

But the biggest thing for me, as a retailer, is that SUMMER IS OVER. That's big deal. Summer and Christmas are when I make enough money to weather the rest of the year. Christmas is still coming, and they haven't yet managed to cancel Christmas, so that's a plus.

Summer turned out at the higher end of my expectations. It's possible August will be my best month, both in sales and in rate of decrease from last year. With Christmas coming up, I'm pretty sure I can stay off the trails the Grizzlies are stalking.

But I think the six months after that, January to June 2010, are going the be Huge Mama Grizzly Bear season.


tim said...

I must have missed something from an earlier post. Which are you? A fool or an Englishman?

Jason said...

"Sometimes the bear will get kind of gnarly on you, especially if you go to bed with a sandwich in your pajamas or something."

It's not that we're going to judged you or anything. What you do in your spare time is your business, but ... let's keep it PG-13, eh?

(*big grin*)

H. Bruce Miller said...

And then there's the swine flu, which according to some experts is likely to infect 50% of the US population. That'll help business a lot.