Tuesday, September 30, 2008

Damned if I trust them.

When I wrote yesterday about "uncertainty" in the retail atmosphere, it was before the 'bail-out' bill failed. I expected them to fix the short term crisis so we could continue on our national profligate self-destruction. Interesting mix of right and left populist politics scuttled the bill.

Unfortunately, they'll probably still pass the bill, after more damage is done. I'm thinking, now that they've gone this far, let's live with the consequences.

I've tried to get worked up and worried about this, but can't quite get there. I've always been a bit of a sucker to being told it's an "emergency."

But Bush and his cronies just cried wolf one too many times. And it stuck in my craw that it looked like to me that money was going to Wall Street. I just don't trust them to structure the bill so that most of the money wouldn't go to the fat cats.

The stock market? A bunch of ninnies. They did themselves no favors in my eyes when the stock market actually went up on Thursday in anticipation of the bail out. It smelled. And yesterday's drop looked like a tantrum.

I am almost convinced that the market will go up today. Like I said, ninnies.

The credit market? Again, all I can see it that they'll loosen credit for the big banks, but most of that won't trickle down to the regional or small banks, and certainly not to the small borrowers.

As a small businessman, I really should be hoping they do something to settle the uncertainty.

But damned if I trust them.

Monday, September 29, 2008

The only thing we have to be uncertain about is...

....well, I'm not sure.

I've never bought into the notion that an election keeps people from buying...until now. Add this highly unusual election with the overall economic climate, and yeah, I think uncertainty is having a huge effect. I am afraid Sarah will 'remove all doubt' this Thursday, though I suppose if she shows up and doesn't drool on the podium she'll be declared the winner.

Who knows whether that will all clear up on Nov. 5. The economics will remain bad, but maybe the uncertainty will be diminished.

....or not.

Sunday, September 28, 2008


My store and I were in the Bulletin this morning, quoted in the "PROSPERING" article. When Jeff McDonald called, I was flattered that he included me in the list of stores that were "obviously doing well, even in down times."

The quote below says I'm tripling my book selection by October. Probably more accurate to say, doubling by mid-October, tripling by Christmas. And he left out my hearty laugh when he asked, "How are you going to fit them in?" Which, so far, every single person I've told has asked.

Don't worry. I got a plan.

The full quote, here:

"Another downtown shop, Pegasus Books of Bend, has seen gross sales drop 10 percent to 12 percent, but its profits have increased due to changing inventory and ordering practices, said owner Duncan McGeary.

McGeary — who added new books to his inventory of comic books, used books and games about a year and a half ago — plans to double or triple the number of his new books by mid-October, he said.

“All my other parts of the store are either even or down a little,” McGeary said. “Books are like a second source of income. I’m not going for books that are best-sellers. I’m looking for timeless, great books that people like to read.”

Interesting article, with a mix of some candor and some evasiveness on the part of store owners, just what you'd expect. I'm always surprised by the candor, frankly, (other than my own) but then, everyone has to know that times are 'challenging'. In a 25 year career, you have to expect up times and down times, even very down times; even just statistically. There is a cycle, and it's best to acknowledge it and deal with it.

It can also be a time of opportunity, if you play it right.

Saturday, September 27, 2008

Credit card pox party.

I spent most of the 90's in deep, deep credit card debt, because I used cards to 'bail out' my sport card losses. I don't regret it, though it caused me and Linda a great deal of stress at the time, because we came out the other end with our business intact, the ability to open another business without debt and profitable from day one.

We ended up buying a house just prior to the price surge, (a matter of mere months), with a fixed rate, and we were able to get to the 20% down within a couple of years. The house may very well end up being worth about what we paid for it; but our mortgage payment is manageable and our interest rate was at a 'historic low' when we took it on.

Anyway, for the last half decade, even during a time of fast growth in my business and downtown, I have not been the least bit tempted to take on debt. It's been pay as I go.

In a way, having dug myself out of debt, inoculated me from the more severe abuses that might have occurred in a time of easy credit.

Also, while pogs and houses are a little different; the dynamic that takes place with bubbles is very, very familiar to me. Pogs, beanie babies, pokemon, comics, etc. etc. have a similar psychology involved, and a similar trajectory and dynamic.

I know what happens when a bubble bursts, and as I've been saying for a couple of years now, it's always way worst than you can possibly expect, and takes way longer to unwind.

And they rarely come back. When this financial crisis is over, and houses finally hit bottom, they aren't going to suddenly shoot back up again. Money will be harder to come by, and houses will probably go back to being a place you live.

Funny how it all works out.

Friday, September 26, 2008

Throwing money at a problem...

is almost never a good idea.

Anyone who has had a 10 year old who swore he'd do his chores after you pay him.

Anyone who remembers the dot.com boom and the burn-through cash rate of most start-ups.

Anyone who remembers STAR WARS I, or II, or III.

Once upon a time, there were two young guys named Eastman and Laird. They had a funny idea for a comic, which they produced themselves, let's call it TEENAGE MUTANT NINJA TURTLES.

It was a surprise success in the comic market, creating the "black and white" boom of the 80's.

There it might have ended, but a marketing guy in Cleveland or somewhere saw it, and turned it into a vast money-making worldwide phenomenon.

Eastman took his money and bought the magazine HEAVY METAL, and married the pin-up model, Julie Strain. Nerd nirvana.

Laird, however, wanted to give back. He had the idea of creating a comic company, Tundra, where creators would be allowed to create what they wanted to create, and would be paid well to do it.

Several years later and vast sums of money dissipated, there was very little to show for it. Lots of horror stories of delayed or unfinished projects, money spent to no purpose, and a certain amount of embarrassment on the part of everyone involved.

All in all, I think Eastman spent his money very wisely.

Thursday, September 25, 2008

Room enough.

I got my first reorder of new books in yesterday.

5 big boxes, lined up against the counter.

Wednesday is my comic shipment day. It's a mad scramble to get all the comics out of boxes, sorted onto the reserve shelves, and put out for sale. Along with all the cards, games, books, and toys that arrive alongside.

Very stressful, so I decided since I would be working all day Thursday (today) that I'd just wait to put out the books.

Pat and I got done with the comic shipment around 4:00, and I kept eyeballing the books, and decided to open one box to see how long it would take to get them out for sale.

All this week, ever since I made my orders, I was trying to estimate how much room they would take and where I could put them. I figured that they'd take xxx amount of space, and planned to move stuff around.

This first order of 168 books (out of 650 ordered) was going to be the test.

An hour later I was done. All five boxes. The books had fit right into existing space without the slightest sweat. Easy as pie.

Which has emboldened me to get even more inventory than I planned. I'd thought I'd stop at about 650 books, but now I'm ready for another 350 books or more. A thousand new books within a month.

It's a gamble of my Christmas profits, basically.

But based on my sales this summer in books, and by the continued foot traffic, it's not that much of a gamble, I don't believe. Plus, with the margins offered, and the profit margins in used books (new books have had the unexpected result in doubling my used books sales) this could be the most profitable part of my store by Christmas.

Plus, like I said, it's kind of fun.

Wednesday, September 24, 2008

Hail, Caesar!

"Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

Caveat emptor.

Tuesday, September 23, 2008

Timeless books.

So I've ordered a third more new books than I currently have, all in one fell swoop. My UPS guy is going to hate me. On my way, I hope, to getting at least double my summer inventory by Christmas. See if there are still some legs in this trend.

After taking a month spending freeze, I feel liberated, almost excited to be trying something new. There is nothing more de-motivating than not being able to try things. Linda seems to be fine with the routine at the Bookmark, and you can't argue with the results. Her store is doing well.

But even in a slowdown, I feel like I have to have something to work with, something to come to work for every day.

Anyway, one of the things I've noticed is that many of the books I ordered could have been ordered 5 years ago, 10 years ago, and even further back. They are classic, timeless, literature.

There is something very reassuring about their solidity, and the response people have to them. In this world of constant change, they feel like an oasis somehow.

Part of my store is very pop-culturish. I'm probably as up on modern pop-culture as anyone my age (minus video games....and internet.....and music....oh, never mind.) I'm up on the pop-culture things I do, let us say.

So...the idea that you can carry product that doesn't depend on the latest and the greatest is somehow a stabilizing, steady, solid thing.

I like it.

Monday, September 22, 2008

We are way past the tipping point now.

Fair Warning.

I've been watching CNBC, MSNBC, and Bloomberg for a couple of hours.

They scared the shit out of me.

My experience with bubbles has never been good. Sports cards, comics, non-sports cards, ccg games, pogs, beanie babies, pokemon; all crashed spectacularly. It got so I'd look at a bubbles at their peak, and just stripped it all away, trying to see the skeleton underneath. I looked at what I thought would be the worst case drop off, and THEN DOUBLED IT!

And that never failed. It was always at least that bad. The crash was always bigger than I expected or hoped, and laster longer.

So...once again, I'd hoped I was wrong, but it's turning out I was right.

The big thing to watch for was always the underlying psychology. When it turned negative, it was all over.

I'll tell you what; if people were still holding out hope they could sell their houses for any kind of premium price, I figure they're waking up now.

They may not be able to sell their house at ANY price, nor borrow money no matter how good their credit or how much they put down.

Capitulation is coming soon.

Been watching CNBC, and here's a couple of eye-openers. You know all those latte coffee machines that McDonald's was planning on installing in all their franchises?
Bank of America has cut off their credit.

To McDonald's. Ditto Dow Chemical. There was an analyst who seemed utterly shocked that Dow wasn't able to borrow money. You could tell she was stunned, disbelieving.

So good luck for all the average shmoes with trying to borrow money.

I'm sort of expecting my credit cards to be taken back -- even though, or maybe because -- I owe ZERO balance. Risk adverse banks aren't going to look at the credit history, they are going to look at the credit risk.

And when they start punishing the people who can actually pay, the whole thing has pretty much fallen apart.

This is the real deal.

And people are sitting on their wallets.


I let Pat have a week off, and worked every day. Not like it was hard, but it does drain me of energy more than it used to. It reminded me of when I worked everyday for 7 years; and when the holiday's would come, all I'd want to do is crash at home.

Anyway, Linda is off visiting a sister in California, so I've had the house to myself for a few days.

We also just brought in the digital box for our T.V. Until now, we've always had just basic cable. We found out that we had to upgrade a little just for the ability to record (in fact, the digital box records). And I started looking at the menu, and realizing that I spend lots of time watching T.V., and I'm sick of missing stuff like True Blood and Dexter, and it would only cost 50 bucks more the get "THE WORKS."

This is probably old news to most of you, but....damn...there is a lot of crap on T.V.

So the combination of Linda being gone and me giving myself the permission to watch T.V. all day, that plus my inclination to Channel Flip, and what a disaster in the making.

I actually did sit down and watch an entire movie; but the rest of the time, flip, flip, flip, flip, flip, flip, flip,....

Went to bed feeling like My Life Is Wasted.

I've got to get a handle on this.

Sunday, September 21, 2008

Naming names.

An article in the Oregonian where they report about Bend area developers and suicides -- and most importantly, BLOGGERS!

A couple of things really popped out at me.

First that there were 4 reported suicides of real estate types in the entire rest of the nation. And 3 in Bend alone. Hey, maybe there is something there, after all!

Second, the implication that bloggers had filled a news void. (And by comparison, the Oregonian is pretty much saying, Hey Bulletin! We just did your job for you!)

She could've actually contacted a few of us who had our names attached -- me and Bruce come to mind -- but I think she was wedded to the "anonymous bloggers" concept. She did actually post a message asking for us to contact her. But I think we were a little leery of her.

Or....another way to put it:

Yeah, right -- we anonymous conspiracy theory nuts are going to contact someone who SAYS she's a reporter for the Oregonian.....

Ironically, Paul-doh is closing his blog just as he reaches national prominence.

Sort of.

I can't resist going over to see what they're saying about all this.

Oh, and she quoted Bilbo/Buster.

Now we'll never hear the end of it!

A new hybrid?

I've talked a lot about the crossover between comics and the literary; between art and pop-culture.

All I know is this...I want what I read to be new and creative and interesting. I don't really give a fig whether it's accomplished through words alone, or pictures alone, or combinations of both words and pictures.

I don't give a damn whether it's big or small. If it comes in hardcover or paperback. Whether it's new or whether it's old.

I can't imagine why it should matter whether it was created for young or for the old: the young at heart or the young in age but wise in heart.

I care about creativity, about breaking through the mundane and the everyday. Such a thing is to be treasured, however it comes about.

I think I've mentioned that I read a lot. Comics, books, genre and classic and literary, and non-fiction and cartoons. I don't care. I just want something that has heart and has thought.

Until now, though, I hadn't taken the final step of bringing in literary fiction and non-fiction as a full part of the store. Now that I have, I do believe I've become a new kind of hybrid store, and as far as I know the only one of it's kind.

There are plenty of game/book or game/card or game/comic stores; there are comic/game or comic/card or comic/book stores. But there aren't any stores I'm aware of that really encompass them all.

Especially the literary fiction and non-fiction along with comic and graphic novel and pop-culture combination.

It's really pure accident, reflecting both the tourist conditions of downtown Bend Oregon, 105 N.W. Minnesota Avenue -- and my own weird interests.

And as much as I'd like to believe that I'm integrating them for the sake of the customer, what's really happening here is that I'm diversifying my store as broadly as possible to survive, but the different elements -- to be honest -- really rarely crossover, except maybe for me.

It's a bit surprising, I guess, that there aren't more people interested in both literary fiction and comics. I mean, there are, but most store owners don't feel the need to combine them commercially. Ironically, it's probably the literary creators and the comic creators who see the merit in each other.

Fun Home, by Alison Bechdel was the graphic novel that firmly bridged to two worlds for me. And I'm hoping that the Watchmen movie will do something similar. A superhero movie that will astound people by its themes and depth.

Ever since I discovered Alan Moore and Neil Gaiman and Frank Miller, I've never been able to pretend that 'books' somehow were more worthy than comics.

Eventually, through pure longevity and cussedness and interest and for the sake of diversity, I've brought in both books and comics. And they are getting more and more equal in my mind.

But the store has taken longer. Ironically, I'm not a book store that has had to come around to realizing the merit of comics, I'm a comic store who has come around to realizing the commercial possibilities of books.

I've had to do so out of necessity.

I've been selling comics for 25 years. In isolation.

Suddenly, my store is surrounded by new retail and hotels and an influx of foot traffic, and I bring in new books almost as a lark, almost an accident.

And they start selling.

The comic customer barely seem to notice I've added books. The book customers seem to think the comics are "quaint."

And I think -- I believe -- I may have discovered a new kind of hybrid store.

It remains to be seen if the combination will work, if one part won't crowd out the other. I'd like to believe that I can find enough people who appreciate creativity in whatever form and where-ever they find it. We'll see.

Saturday, September 20, 2008

Bringing in new books.

Actually, I think I'll talk about the types of books I'm going to buy over on the Pegasus Blog, but my business strategy and tactics over here.

At any one time in my business planning, I'm surveying the terrain, trying to figure out which product lines to support, which to let slide, and which to try to increase.

Preferably I want product that both sells and makes a decent profit.

Some product sells well, but without a decent profit.

Some product has a decent profit, but doesn't sell well.

Ideally, you'd like to have both.

But of the two, selling is the most important. That's why you can trap yourself into a situation where you fill your store with 'in demand' product that has lousy profit margins: which in effect means you're just working harder for less.

But without any sales at all, you're nowhere.

My basement is full of product that if I could sell it would be 100% profit, but I don't even bother to display because no one wants it.

Anyway, back to the top of the post. I'm trying to be savvy and canny and smart about how, what, and when I buy stuff. This isn't meant to brag, but to explain.

This is where experience really kicks in.

For instance, the first time I saw a product begin a precipitous decline was sports cards. Someone one day just turned off the spigot. Panic set in. All my competitors were cheaper than me; I couldn't figure out how they were making any money, but I lowered my prices to catch up.

Following losers right down the rabbit hole. The answer was they weren't making money; suicidal competition. And by following them, I insured that I wouldn't make money either.

I finally woke up one day, came to the store, lowered my orders, raised my prices.

The difference was dramatic. I stopped losing money. That very week, I noticed it. I stopped bleeding red ink. I had the product in stock, when it sold I actually earned a profit, and I didn't have to constantly expend money to get more.

Of course, sales dropped dramatically, too. But I learned you don't lose money on stuff you don't sale, you lose money on stuff you order and sell for too little, or the stuff you order and don't sell at all.

It's a fine difference. You want to have a going concern, which means having product that you can sell.

Anyone who has been in my store will know that my own solution was to diversify, diversify, diversify. I have filled my store with 8 or 10 different types of product, any of which could have been a store in itself. A pop culture consortium, if you will.

The only time I ever felt helpless (both my successes and my failures are all mine) was between 1995 and 1998 when everything I was selling was on the downside, and I couldn't find any realistic product to bring in. Graphic novels had barely begun, the only toys available were mass market, the book market was impossible because the wholesalers were useless to me, and so on.

Hard to imagine now that there was a shortage of product back then.

I make certain that I earn at least a minimum profit margin on everything in the store. If that means a product line slows down, fine, I just maintain it by making sure I get the new, good stuff and an adequate selection of the old good stuff, and turn my attention elsewhere.

I've always had the practice of diverting at least some of the profits from hot product and/or flush times into shoring up weaker products, or adding a new product. Which is why, I think, that I actually tend to turn a profit when things slow down instead of when things are going well. Because I'm constantly preparing for the next downturn.

It's very difficult to add new product lines through cash flow. Either you borrow money to get to a credible level, or you have other product supporting you while you are slowly building. I've gotten really good at that.

Which is why I'm more comfortable this time around, because all my lines are fully stocked, and I just need to maintain them.

Except for books.

Books were brought in almost as a lark. You get asked enough times for a book like DUNE, and you don't have it used, and it finally occurs to you that maybe they would buy it new if you had it.

So far, I've been able to stock the store with favorites, classics, and 'cult' books -- that is, books that have a following, that are passed along lovingly to each person.

I'm pretty sure that if I make an effort to have 'core' product in each area of fiction, but then spend most of the money on the 'cult' books I have a going concern.

I can carry more books than I have now, and it was such a success this summer, and I have so many people walking in the door who will never buy a comic or card or toy, that it just seems like a really good idea to bring in more books.

Every single person I've told this to has said, "Where are you going to put them."

Well, I have it all mapped out. And, if they sell extremely well, I can always find dead product to put in the basement.

Plus it's fun and exciting. A new adventure.

Half a trillion here, half a trillion there....

and before you know it, we're talking about real money.

Randy Sebastian has filed for Chapter 11 (news in the Oregonian, nothing in the Bulletin.)

I thought one very revealing remark was:

"By then, real estate sales slowed across much of the country. But Renaissance's honeymoon continued into early 2007.

Renaissance sold 116 homes in the first quarter of that year, its biggest quarter ever. In February alone, it sold 48 homes for nearly $30 million in revenue.

"Nationally, we heard sales were going down. Our sales were up," Sebastian said. "We were thinking, man, Oregon's going to survive this."

Hey the invaders have pillaged and torched the next village over, but we're fine. Don't bother to man the ramparts or close the gates!

I mean....what a doofus!

I'll say it again -- the damage is done behind the scenes and when you ain't looking. But the time it reaches the point where the public notices, the closing of doors, the clearance sales, the damage is done.

After watching the sport card, comics, magic, beanie babies, pogs, pokemon bubbles burst, I'm just a tad risk averse.

You can't stop working it, though. I've pretty much decided to pursue the books angle in my store, and just ordered a huge number of new books. More about that later on the Pegasus Blog.

(After the preceding, I realize the last paragraph is a bit contradictory. So I thought I'd try to explain myself. Because of the way billing works, because I have a certain amount of money to spend for Christmas, I'm ordering the bulk of my estimated material earlier rather than later. If I'm going to be getting xxxx amount of material, somewhere between now and late November, but the Christmas is going to pay for it either way, I may as well get it now.)

Friday, September 19, 2008

Moral hazard? What moral hazard?

It seems to me that the response of the stock market to the creation of a Resolution Trust agency -- 450 rise yesterday, and a similar rise so far today -- is the very essence of 'moral hazard.'

"Sonny. You wrecked the house last weekend while we were gone. You broke all the furniture, threw up all over the carpets, tore down the curtains.

"But don't worry, we've hired some cleaners to fix it all up.

"Please don't do it again.

"And, oh by the way, your mother and I are going on vacation next week. We want you to be good, O.K?"

All is well.

Kinda funny. I've had 3 or 4 fellow bloggers come in the store in the last couple of days to check up on me. Apparently, I was "crushed" by the recent argument (two different people used that word). And here, I thought I'd held my own pretty well.

No, I'm fine. I'm just refocusing on the store. And like I said, I finally realized that not only couldn't I change anyone's mind, but that I didn't even know who the 'anyones' are, what with all the name switching.

RDC and Black Dog got a pretty good discussion going, which I'm glad to host if anyone else wants to join in. But I will insist on none of the name-calling, and please pick a non de plume and stick with it.

Palin is turning into the 9 day wonder I always thought. Obama just keep perking along. We'll see.

Meanwhile the federal government has stepped in, saying "Don't worry, we'll take care of the debts."

Now if someone would just step in and tell the feds that.

"Hey, Mom! I maxed out my credit cards and I still have most of my school books to buy. I'm coming home!"

"No, no. Sonny. We'll send you money. But this is the last time, you hear me!!!!"

Thursday, September 18, 2008

Pulling in my horns,

I continue to pull in my horns. I've dropped the more vociferous sites I was visiting, and I am concentrating on my business related blogs. I've stopped checking the site meters, and all that.

I have a new found fascination with Wall Street, in a train wreck sort of way, but I can only read or watch so much of that before my eyes glaze over.

I'd love to know how other businesses are doing, but other than my wife's store which is both infuriatingly and encouragingly doing well, I have no other reliable stats. As I've found in the past, I'll not know how it's going until much later.

So, I'm just going to concentrate on my own business for the time being. Even though I had a major increase in sales from 2000 through 2007, I was very careful not to add any overhead, so I'm in pretty good shape even if there is a dramatic fall in sales. It's like I've built a really nice, sea worthy craft, but there is a hurricane coming and it's going to be put to the test.

I'd much rather sit pretty in port, but that kind of defeats the purpose of having a boat in the first place. So I'm out in the ocean, watching the waves get bigger, and feeling pretty confident, but....nervous.

I must say there is a disconnect between what my store is doing and what I'm seeing locally around me; announcements of new stores and events. Frankly, the Wall Street news seems like a bigger deal than most people seem aware. Bless them. Keep that activity going, while I keep caulking my boat.

Wednesday, September 17, 2008

Downtown Wack a Mole.

I guess downtown will be O.K. as long as we keep lining up new owners.

I'm getting a new neighbor where the dress shop was, an art gallery.

I'm sure that the Paper Place space will be filled shortly.

And in today's paper, there is a new tenant to the Zona store (without really spelling out that the Zona store would be gone). The owners seem to be sure that they have a new idea; or an old idea, I'm not sure, but they are for sure different from everyone else.

And so it goes.

Tuesday, September 16, 2008

Oceans of parking.

I kept looking out my window yesterday, and seeing parking spots. This happens occasionally, but not usually all day. At one point, 8 spots out of 12 were open, and rarely less than 4. One of my little gauges for how business is going.

The other guage, of course, is my cash register. The thing I didn't know was whether the drop off I started to see last August, (After 10 years of increases) would stabilize or continue to drop into a fresh year. Well, after August and the first half of Sept., I'd say bottom isn't here yet.

I'd hoped, planned and tried to get a good profit this month, instead it looks like I'll break even. Considering the drop, I feel as though I should be pleased that I was savvy enough to see it coming. All bills paid in full, no resorting to cash or credit, credit cards paid in full, employee taxes paid on time, etc.

So I want to emphasize that I'm in good shape; indeed, I've not been this solid in the fundamental finances since....well, ever. Mostly I scrambled those first 20 years, so the last five years, including this one, have been like a stress-free vacation in comparison.

But, dammit, I wanted to try to make money.

This is one of those times when I can't really tell what others might be feeling. Linda doesn't like me to talk about her store, much, but I think it would be O.K. to say her store is doing well. Perhaps used books are recession proof.

Comics obviously aren't. As I've said before, I started seeing in mid summer that beneath all the activity, my regulars seemed to be cutting back, leaving town, leaving comics on their shelf for next time. So, I had guessed that when the tourists started fading I might see a retreat. So I ordered according.

This is where my experience has really kicked in. I don't hesitate to prepare. The way my business works, most of my prime product is ordered far in advance and once I order it, I pretty much have to receive. But ordering just what I need is not the same as ordering what I need and what I want.

I figure I can order what I 'want' at an instances notice. Just pick up the phone, and say, I want that and that, and five minutes later I'm committed. And less than a week later the stuff shows up.

I've resisted both overordering and reordering, pretty much this month. Keeping in the base stock, the evergreens, but letting the stuff I buy for fun or at a whim or as an experiment go.

The other encouraging thing is how well books, new and used, continue to sell. With the used books, my margin is great and I have a constant flow of material. So that has turned into a real backstop.

Hell, I've decided to relax and enjoy the slower activity. There's a positive side to even that!

Monday, September 15, 2008

Were you watching the financial channels?

Last night?

If not, you should have been. CNBC was showing the Asian and European financial programs, instead of Deal No Deal.

I've always thought they have some real financial babes on the U.S. programs, but uh la la, the European babes are something else. Different style, for sure. English ladies with pixie haircuts, pouty lips, hoop ear rings, and off the shoulder dresses. German chicks with deep voices, and angular but pleasing chins and cheeks.


Oh, and there was some financial crisis.

Sunday, September 14, 2008

Good Riddance

Well, Paul-doh is doing me a favor and pulling the plug on his BB2 plog.

It had gotten more and more frustrating to me. I didn't mind the language, or the buster bluster, or the right wing loonies...but I never knew who I was talking to. Constant shifting of names, or no names, or even identity theft.

It was like talking to a hall of mirrors. Pretty useless.

I wouldn't go near the BB3 blog if you pulled a gun on me.

So...that stuff is gone.

Good Riddance.

Saturday, September 13, 2008

Mug shots again.

Seeing the pictures of the cold case files reminded me of my fascination with mugshots. I've seen those same pictures of missing and murdered people over and over again over the years. (Should one leave a flattering picture around for that purpose, or is that too gruesome? It's how you'll be seen forevermore.)

They used to say, if you were going to murder someone, murder them in Central Oregon cause you'll never get caught. A probable cheap shot, and I apologize to our law enforcement, but it's too good a line not to use.

Anyway, I've been fascinated by the pure hopelessness you see in mug shots. And how the guys all have either wild-assed hair or very short buzz hair. Was talking to a policeman customer of mine, and he said the cops keep their hair short so it won't get grabbed in a fight.

Anyway, I'm reading UP IN HONEY'S ROOM, by Elmore Leonard, and he had this to say about mug shots.

"At the end of the trail ," Kevin said. They were typical mug shots, taken at the low end of the subject's appearance.

"end of the trail" "low end of the subject's appearance"

Well, exactly.

Thursday, September 11, 2008

The big shoe.

The next Wilt Chamberlain shoe to drop.

Commercial Real Estate.

Quoting from the good people at Calculated Risk:

"Historically investment in non-residential structures lagged investment in residential by 5 to 8 quarters. The reasons are pretty clear - the commercial builders (for malls, offices, lodging, etc.) don't build until the residential is in place, and the commercial build cycles are usually longer than residential."

There are articles in the Wall Street Journal: "Mall Glut to Clog Market for Years and the New York Tims: A Squeeze on Retailers Leaves Holes in Malls."

(Just so you know, the Calculated Risk people are saying the CRE bubble doesn't compare the residential bubble.)

Here I'm going to fall back on that old bromide, all Real Estate is local.

We've had quite the building boom in Bend. It seemed like a lot of the construction workers just slid on over the CRE. But as I've said many times here -- if a project hasn't already broken ground by now, it's unlikely it will for the next few years.

There have already been a few high profile delays, and I suspect there are many more that are being quietly tabled.

So my concern again, in my business, is for the lost jobs.

Look around Bend and tell me if we have enough hotels. Enough stores. Enough restaurants. Enough office space.

From what I've been reading, the money for commercial development pretty much dried up at the beginning of this year; architect billings, which are a leading indicator, have cliff dived.

So taking the "5 to 8 quarters" time lag figure above, I figure that there will be few if any new projects in the works this time next year. We'll finish up what's being build and ....then....?

For one thing, the financial institutions still have some big blows to take, and some of them are already on the ropes. Combine CRE with all the time bomb Alt-Loans, and I think it's silly to call an end to the housing bubble. These things all inter-connect. Money dries up everywhere.

How does it affect Pegasus Books?

For one thing, it probably eases up on the upward pressure on rents. I don't think it's enough yet -- or enough in time to do me much good -- in actually lowering rents. Especially downtown.

It also means its less likely that the building across from me, or down the street, or even my own building, will be torn down and replaced, or even majorly renovated. I wasn't looking forward to looking at scaffolding for a couple of years.

And it also means that there is space available, if need be, if the worst happened and I had to move. I've been watching Greenwood, and there are still about 13 or 14 spots open. 3 or 4 of them might actually work for me. (Anyone want to loan me the money to buy the Boomtown space?) I'd probably be able to negotiate a decent lease; especially for the beginning year, which would be the roughest one.

But I'd really like to finish up my career where I'm at. I like downtown Bend. I'm comfortable. If I was 10 years younger, I might be willing to take a leap into a bigger spot, take a 5 year hit on earnings so that I could have better earnings for the last 15 years of my career.

But...I'd rather not do that.

So, I'm expecting and hoping to just renew, probably at a slight increase, probably do a bit of renovating, and stick it out.

Wednesday, September 10, 2008

Arguing politics.

Spent the last two days at home with a cold (which is a real luxury) and got drawn into a political....discussion? argument? mud wrestling match? ...over on the Bend Bubble2 blog.

It got a little heated, here and there.

I need to apologize a little if I said anything to offend.

I don't talk politics not because I don't care, but because sometimes I care too much. And I love a good argument, but sometimes I don't know when to say when. It becomes deathmatch 2008, and I don't leave until everyone is pissed at me, or I'm pissed at everyone else.

It's O.K. for Tim and Buster and Marge to say things, cause they're all anonymous. But I was in the mud with them, and getting my name splattered. There are 673 comments as of going to bed, only 3 days since the posting. And about 100 of those are me.

There has always been a bit of a misunderstanding of me by calling me Ned Flanders. I'm just not that nicey nicey, and certainly not that religious. I'm probably more like Milhouse, who could be a little mean little bastard whenever he got a leg up. I sometimes don't play well with others.

So...safely back here, and safely not talking politics or religion.

Tuesday, September 9, 2008

With a whimper, not a bang.

Lots of little things going on. Little drops in attendance at the public schools. Drops in airport boardings. Drops in pending housing sales. You know, little 3.5% drops here, little 4% drops there.

Except that we have been geared for growth for years. Not flat, not drops, increases.

So, a couple a down years in a school district and suddenly you're talking a 9% drop. Which is pretty significant. A 10% drop in Bend lodging? Looks like 50k disappears.

And on it goes.

What's revealing is that even these little drops are bigger than anything we've seen in a decade. A decade of growth -- vs. little drops. A double whammy.

My own store was down 10% last month, but that followed a drop last year too. So not happy about that. It gave me time to adjust, and I'm still ahead of a very profitable year last year in profits. But I'd feel better if sales were strong, too.

I think Bend needs to get off it's Growth Kick, and adjust to reality.

I find one of the hardest things to do in my business is change my focus from growth to maintenance, or from maintenance to growth. It's like an ingrained habit way of thinking. If you're going -- grow, grow, grow, it's extremely difficult to say to yourself, wait a minute, maybe it's time to maintain.

I do believe that Bend is having that problem right now.

A couple of letters and guest columns in the Bulletin today. One about the Bend Parking Garage being cheap at 45.00 a month. I don't disagree, except to point out that to a 20 hour a week, minimum wage employee, even 45.00 represents 10% of their take home pay. I'll always advocate free and or even cheaper parking SOMEWHERE within a decent distance from downtown for those that need it.

Also a very interesting analysis of the ridership on BAT. I've always thought the BAT was a worthy idea whose time hadn't come. It would be even more interesting to see what the per passenger cost is -- I've always maintained that we could give out taxi chits, and support local business for cheaper.

Getting an art gallery a couple of store down from us in our building. Downtown Bend continues to attract high-end businesses, which I guess is better than not attracting business at all. I'm conflicted about it. Of course, I wish him every success. (He's going to be my neighbor, after all.)

Seriously, now that I've added new books to my store, I'm benefiting from the types of customers these other businesses are attracting. That was my problem, and I needed to come up with a solution. So...bring them on.

Monday, September 8, 2008

Getting Beck on a Brooks and Dunn diet.

A little follow up to my entry a couple of days ago about the concerts.

Turns out, acts like Brooks and Dunn get a bigger local turnout. Who'd of thunk it?

Meanwhile, acts like Beck and Wilco get 70 or 80% turnout from out of town. How normal is that? I mean, depending on such a huge chunk of your business from out of town?

It seems like a lot of the businesses downtown are the same; not really positioned to attract local yokels, but to attract visitors.

Linda and I were driving downtown the other day, and there were some nice looking shoppers.

"I wonder how long the beautiful people will stick around," I found myself saying.
"This ain't their natural habitat."

I keep coming back to the question; what do they do for a living and how do they sustain that lifestyle?

We got the 20 or 30% of locals of the crowds who support groups like Beck, and I suspect the same is true of some downtown and Old Mill businesses. That can't be healthy.

Sunday, September 7, 2008


"When there is much desire to learn,
there of necessity will be much arguing,
much writing, many opinions; for opinion
in good men is but knowledge in the making."

Milton, Areopagitica

This essay on free speech is probably the best argument I make to myself as to why I went to college. I think of myself as a auto-didact; I read constantly, and try to challenge myself -- not too much, that way lies reader's block. But stretching.

Still, I never ever in a million years would have read this essay if it hadn't been assigned. In fact, some of the most memorable things I read in college came about the same way. And it wasn't the practical stuff that I would've thought I needed or wanted at the time that has stuck with me, but the more general philosophies and intellectual thesis's, the ethical and moral literature, that has served me best.

Areopagitica.!? Talk about being put off.

I expected a dry, boring impenetrable philosophy tract. John Milton?

Instead, I found a fascinating and deeply thought-provoking argument against censorship. This is an issue that never goes away. In the internet age, his arguments are more cogent and concise than ever; in fact, I think I need to go back and read it again. If I remember rightly, it wasn't a chore. His language was beautiful and poetic, as well.

Probably anyone who writes a blog, especially on politics, should read it.

Saturday, September 6, 2008

We own the Bank.

They say when the Titanic hit the iceberg, most passengers didn't even feel it.

The Fannie Mae and Freddie Mac are like that. Tectonic shifts that we don't feel locally. If WaMu went belly up, that would be alarming.

The biggest bail-out in history?

Not so much.

But it does prove the old adage; owe the bank a little, they own you. Owe the bank a lot, you own the bank.

"Supporters, however, argue the government had little choice but to support Fannie and Freddie, which together hold or guarantee $5 trillion in mortgages — almost half the nation's total." USA Today.

Well, we own the 'bank.' The government, the taxpayer, you and me...

I feel really wealthy owning so much debt.

Friday, September 5, 2008

Laying low.

Just dealing with my motivational level right now.

I seem to have two gears: totally engaged, and totally unengaged.

I'm not proud of it, but there it is.

Summer is over, the customer count has dropped in half.

I got caught flatfooted by our tax bill, which is due mid-October. I'm trying to save up for it, which means getting in all the pre-ordered product, but laying off reorders for a few weeks.

You wouldn't think that would be such a big deal, but when you've been ordering actively for 5 or 6 years, and then suddenly have a freeze, it's harrowing.

So just laying low for a couple more weeks, then step back into the fray.

Thursday, September 4, 2008

"You're getting better concert acts than WE are!"

I've heard this comment more than once this summer. Fill in the blank on what city they're talking about.

I don't know if this is actually true.

But I do know that the quality of acts Bend is getting is about 1000% higher than just a decade ago.

According to the Bulletin, "Holiday weekend lodging was off 3 - 5%".

Along with this line: "...downtown Bend reported "very strong business" over the weekend, due to summer concerts at the Les Schawb Amphitheater."

I've been wondering for some time, now, whether these concerts as a whole generate enough ticket sales to pay for the marquee acts? Or are they being sponsored and supported by corporate promotional funds? And whether or not this will continue forever?

Because it seems to me that 'sponsored' events are always just a withdrawal away from not happening at all.

But I don't know to what extent the 'sponsored' money is propping up the whole arrangement. I suppose I'll never know.

Wednesday, September 3, 2008

Getting it up.

I'm in a non-buying mode, which is a turn off my brain mode, which means I don't have as much to write about.

I noticed that IHTBYB couldn't get it up this week at all, so I don't feel so bad.

Tuesday, September 2, 2008

The real joy of owning your own business.

When I see a problem or an opportunity, I don't have to ask permission to deal with it. I don't have to convince anyone else, I don't have to get a consensus. I don't have to worry about how it might affect others in the group. I just do it.

I can avoid group think, altogether.

I've had yet another example of that.

A couple of months ago, I noticed my 'direct' shipping costs had doubled, making what had been a convenient but only marginally profitable process into a convenient and unprofitable process.

I brought this up on the Comic Book dealers forum. Now, I haven't been posting there much. At the beginning, when it was new, I used to defend my viewpoint vigorously, but as time went on, the usual 'in' crowd developed, and with it the usual group think. I could always count on Rory Root -- a highly regarded dealer in Berkeley -- to give me a fair hearing, but once he died, I kind of just used the forum as a place to get information.

So I brought this up, and was summarily dismissed. By the leader of the group, who has in my opinion become a bit of an arrogant guy, telling me in a somewhat patronizing tone that "postage prices were going up."

Well, yeah. I knew that. My question was, why so much? And what were others doing about it?

But, hey. I got over my twinge of anger. My fault, I thought, for not being there more often, for not joining in on the banter. I could defend my viewpoint, but why bother?

I analyzed the shipping times and costs and came up with a solution that worked for me, and forgot about it.

So...for the last two days, there has been a long thread on the Forum about how shipping costs have gone way up, and what is everyone going to do about it?


I try not to be resentful of this. I'm aware that small groups work because of socialization, and because you prove yourself. They work by consensus and discussion.

I see a problem and just want to deal with it.

I never try to be part of the in-crowd. There lies 'group think', which I find so often to be wrong for too long; eventually they get it right, and then rewrite history to reflect that they were always right.

But by then, the damage is often done.

Besides, I have a feeling that if I was part of any in-crowd, I'd turn into Caligula or a Heather or something. Wouldn't handle it well at all.

Making my own decisions when I want, and how I want.

That is the true joy of owning my own business.

Later: And while I'm burnishing my loner persona, I also ought to mention my dismay with the professional organization that has been set up by the comic dealers.

Oh, I understand that they need dues and fees for the organization to exist. I understand why membership should be required for things like health insurance and banking services.

But their bulletin board is also for members only. Indeed, some retailers who used to post quite often on the comic forum have removed themselves.

Why? If the information is meant to be helpful for retailers, why make it exclusive? If you must, you can have an exclusive part, where you discuss membership matters.

No...my immediate reaction is, exclusivity sucks. You can keep it.

Monday, September 1, 2008

Things I "Can't" talk about?

I've had it with Sitemeter. I find myself obsessively checking it. Tailoring my blogs.

To hell with that.

I'm never going to check again.

At first, I was disappointed in how many people were reading. Then I decided that -- on a regular basis -- the numbers were actually pretty good. But then I wanted to keep those numbers.

So, I'm done with that.

Back to writing whatever I damn well please.

One thing, though, was that it became pretty clear to me that most of the readers of the blog were probably not actual regular customers. A few.

Which is somewhat liberating.

So far I've been able to mostly be completely candid about sales because, well, sales have been good. Even the drop off in sales that started last August hasn't really been that much of a concern because I've handled it well, even turning a better profit.

But what happens if it really gets bad? Can I continue to be honest?

So far, I've learned never to slam customers, especially kids. Never to talk about other businesses in town by name. Never to give out sales numbers too specifically.

I don't think anyone expects me to.

But, unlike most everyone else, I'm not sure it really matters. I just don't think enough people are reading, or taking it seriously enough to take umbrage. I've always had a kind of odd feeling about this. I just don't think what you say matters all that much. Or much less than most people do. Maybe I've just experimented enough at the store with different sales techniques to realize that what you say matter much less than you think it does. Or how you say it. Or how often.

Which flies in the face of most conventional wisdom. You know, words sharper than a sword, sort of thing.

It's all self expression. Entertainment.

I suppose there are moments, when choice words can have an effect. Not sure when a blog can fill that moment, though. It would have to be a lucky strike.

Planning for fall and winter.

Once again, for the sake of my own business planning, I'm going to be making some informed (wild-assed) estimates (guesses) on the business climate in Bend.

I have no other information than my own sales figures (navel gazing) and experience.

I suspect that sales in Bend, overall, are probably down 10% to 30% or more from the peak. Let's average it out at 20%. At least, that's where I would've been if I hadn't added new books and new games.

Of course, some stores probably aren't seeing a downturn at all, some are probably actually seeing an increase, some are probably sucking eggs. But, overall, I think a 20% estimate isn't probably far off. At least for established stores. For new stores -- well, they don't even have figures to compare, do they?

Second question. How long will this last?

I'm betting anywhere from 2 to 5 years from now. So, we'll probably see a further decrease in sales for at least a year or two.

Meanwhile, Bend has so much momentum, retail-wise, that I think we'll see stores popping up all through that period.

How are others going to handle it?

Some will have the ability to handle a 20% decrease, but not the motivation. Some will have the motivation, but not the ability.

If that 20% becomes 25%, the formula changes again. Some new stores won't even know what they're missing, (lucky or unlucky?) though they might fall short of projections. Still, downtown Bend is such a high-end location anymore that I'm going to assume most new businesses have some capital to back them up.

Small business is hard even when the business climate is good. On the other hand, I've always maintained that new businesses can last 2 or 3 years even when they're bleeding red, and there are so many businesses in that time frame that we're unlikely to see a collapse.

At least, not one that is noticeable. Bend has a very high churn rate. I suspect that when a business vacates downtown Klamath Falls or Baker City, it has a noticeable impact. In Bend? Not so much.

Ironically, it is the older more experienced businesses that seem to quit first. Both because they know that things are unlikely to turn around any time soon (and like I said, they know business is hard even when times are good.) And because they have a weakened immune system.

As I've said before, many stores can survive, but at a weakened state, which is a dangerous place to be. I don't expect a major downturn from here, but it could happen, and that's when the weakened state starts to become a deciding factor.

Any way you slice it, though, it will be a long slow process, muddled by the continued opening of news stores. It's unlikely that lease rates will decline any time soon. I'm going to continue to hunker down, just in case.