Weekend Edition: June 9-10, 2007
Whew! It’s been an exciting first week blogging for Boom2Bust.com. I forgot how much I enjoy writing, although I’m still trying to shake the rust off. I hope you find the blogs worthwhile as well. I am always open to comments from readers. Let me know what you think at editor@boom2bust.com. Just don’t contact me expecting to get into a debate. If I’m not blogging I’m too busy conducting research and getting a new business off the ground.
Speaking about new businesses, I would like to tell you about a piece that was written by Richard Russell entitled “The Perfect Business.” For those of you not familiar with Richard Russell, he has been the editor/publisher of Dow Theory Letters since 1958. From his website:
Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron’s during the late-’50s through the ’90s. Through Barron’s and via word of mouth, he gained a wide following. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-’66 bull market. And almost to the day he called the bottom of the great 1972-’74 bear market, and the beginning of the great bull market which started in December 1974.
“The Perfect Business” was written by Mr. Russell in the early 1970s and appears on his website under the heading “Popular Articles.” It is his most requested and most quoted work. In “The Perfect Business,” Mr. Russell lays out the criteria necessary for the “ideal business.” The more criteria you can apply to your new job or business, the better off you will be, Russell says.
Finding myself in the position of starting a new business, I find the article inspirational. But the reason I’m mentioning “The Perfect Business” in this weekend’s blog is that it contains a segment that should serve as a caution to those contemplating a startup anytime soon, based on my belief in a coming financial storm. For all you would-be entrepreneurs, take heed of the following advice Mr. Russell’s father gave him:
Here’s what my dad told me: “Richard, stay out of the retail business. The hours are too long, and you’re dealing with every darn variable under the sun. Stay out of real estate; when hard times arrive real estate comes to a dead stop and then it collapses. Furthermore, real estate is illiquid. When the collapse comes, you can’t unload. Get into manufacturing; make something people can use. And make something that you can sell to the world. But Richard, my boy, if you’re really serious about making money, get into the money business. It’s clean, you can use your brains, you can get rid of your inventory and your mistakes in 30 seconds, and your product, money, never goes out of fashion.”
I can’t predict whether the U.S. financial crash will be swift or drawn out over time, but for someone looking to start a business in the near future, you may want to make a special note of those comments regarding real estate and manufacturing with a global emphasis. Furthermore, be wary of any business that focuses on providing non-essential services. As times get tough, these will be the first to fail. Building a successful business is hard enough. Make sure the type of business you choose is one that will prosper in the coming financial storm.
Enjoy the weekend!
Christopher E. Hill
Editor
editor@boom2bust.com
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