April 2, 2001—Big
Lacrosse is breaking out all over the United States, and there are already
weeds in the garden. It must be Spring. For Chaucer, it was in April that
His showers soaked you with bliss. Eliot called it the cruelest month. Take
your choice. This is either a moment of gorgeous opportunity or the darkest
The "non-recession" we are experiencing is spreading pretty fast, as we
noted last week. Of course, we are only imagining it, but I notice just
about everybody I know is developing a pretty good imagination. Many have
had more than two consecutive quarters of bad dreams.
What to do? Neither viagra nor escapism will help. We suggest you get out of
the water, even take a big gulp, and go forward. Don't wait around for
things to get better. So here's a list of "do's," in no particular order:
1. Radically narrow your focus. This week Marks & Spencer, the
English department store, announced it was dropping Brooks Brothers and
groceries in the United States, as well as dumping some European emporiums.
Back to "Marks and Sparks" in London. There are always profits and growth to
be had in the boring, tired idea that put the company on the map in the
2. Hire experience. Obviously the whiz kids and the dotcoms are out.
If your business is in trouble, find a bored sixty-year-old ex-chairman
who's now clipping his coupons and who has been around the track a few
times. He will find sales and pare expenses. Just like the brokerage house
ad said, he will do it for you the old-fashioned way.
3. Buy some super-value stocks. We mean deep, deep value. They
actually exist. There are companies selling for less than book that are
making a profit, undiscovered by the sheep-like portfolio managers at the
institutions. They're better buys than Ben Graham would find for you.
4. Hedge everything. We don't know when this non-recession will end.
You don't need a hedge fund to short the market. As we have mentioned
previously, the right thing is to look for an integrated risk
strategy--which takes account of every risk in your business life--and try
to offset all risks at an acceptable cost. In one manner or another, one
must hedge stocks, currency fluctuations, commodity bumps, etc.
5. Find A Growth Market. Even in trying times, they always exist.
We're firing lots of executives right now, so there's room to grow in the
headhunting business. As previously noted, China grows and grows through the
Asian economic crisis and everything else.
6. Get Out and Sell Something Now. Your competition has grown lazy
and dispirited as things turn down. It's a great time to knock on doors,
lots of doors. Somebody somewhere will buy. You will gain market share. In
fact, you may achieve a higher return on SG & A now than you would
experience in good times.
7. Look for an insane strategy. In New York City, Crazy Eddie of
appliance fame used to claim his prices were insanely low. For a while he
moved a lot of merchandise. This week on the Global Province we learn that
Cogent Communications is battling local phone companies by selling its
product at 2% of the going rate. That just might capture somebody's
8. Park your worries. You may have noticed that more faces are
averted these days, looking downwards. The number of inconclusive meetings
has increased. "High anxiety" is rampant. Decisiveness is out to lunch. The
late Crosby Kelly--a public relations impresario who could have taught
Phineas Barnum a thing or two--said his first stratagem on going back to
work at stumbling Litton Industries was to get people looking upwards again,
getting their eyeballs out of the carpet. In recession (oops, in
non-recession), avoid depression. Do something bold to lift the spirits.
And we are fitting in a few vacations. Even Jack Welch promises to take more
vacations in retirement. Read more about the good stuff in Morocco this
week, with a few pointers on Florida coming up.
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