This lovely story has been told countless times to illustrate how “we look at things in the light of eternity and our perspective and values totally change.”
“A wealthy woman pushed aside her diamond rings and jewelry, instead grabbing three small oranges. She quickly found her way to the lifeboat as Death boarded the Titanic. Worthless things had become priceless. And in a moment she preferred three small oranges to a crate of diamonds.”
Another story is not told. A woman in the stateroom next door grabs all of her jewelry, one small orange, and on the way to her lifeboat notices in the cabin next door a box filled with expensive bracelets and necklaces, which she also takes.
Two hours later, both women have been rescued and are on board the RMS Carpathia. The first woman is sitting on the deck eating her oranges. The second woman marches to the ship’s bridge demanding a quiet and discreet conversation with the Captain.
A few minutes later the Carpathia’s radio operator sent a telegram to her husband telling of her safety. He also made reservations for a suite at the Waldorf Astoria Hotel where she would arrive three days later and contacted her broker to sell her bonds in International Mercantile Marine Co., the owner of the Titanic. She stays in the Captain’s quarters and upon arrival in New York, the Captain makes a secretive trip to an office at 47th Street and Fifth Avenue in the “Diamond Merchant District.”
The next six to 12 months will see some generous opportunities unfold for those companies and individuals that possess two characteristics. They must be cash rich and have a predatory attitude. The first is self-explanatory. The second means that they are willing—as all lions know—to take down and eat the weaker zebra at the end of the herd.
Two conditions will become more apparent and obvious as the next weeks unfold. The first is that companies that depend on constant cash flow for survival and have heavy debt will close. Already, stories are being told. One gentleman is shopping two of eight franchise locations of a large and popular restaurant chain. He must sell two in order to be able to keep the other six. And he is a distressed and anxious seller. Someone will come to “eat that zebra.”
The shopping mall business will be a minefield. On one hand, the owners are not going to go out of business and can weather the storm. However, there will be many businesses that do close, leaving vacant storefronts. Rental income is important but more important is that if your favorite salon, food outlet, or clothing store closes at the nearest mall, you will go to some other mall. Mall operators cannot afford a reduction in foot traffic or other tenants will demand more rent decrease.
There will be no increase (best case) in disposable income for economic groups below upper-middle class for the next two years. Projections are that compensation paid to the call center and related employees could be as much as 30 percent lower by the end of the year. That will not improve for some time.
Again with cash and “predator” instinct to chase opportunities, companies have two choices. They can adopt and expand their businesses to serve the wealthier economic groups. Or they can find ways and products to better serve the lower economic groups, which will now have less income. The future will be bright but only for the smart, wise and strong lions.
E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.