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April 2, 2001Big BathSwallow, Don't Wallow

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 of times.

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 first place.

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 attention.

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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