I am a big fan of sharing what I learn. It keeps me accountable for learning it well and gives me a chance to give back to others. Not sure if this topic has been discussed in the past but here we go:
2 Big Lessons from Paul Zane Pilzer:
#1. There is no such thing as a recession
What is happening during a so called "recession"? Technology is improving. He uses a great example: 10 fishermen are on an island. They all catch 10 fish a day for a total of 100 fish. Someone comes along and invents a net. 2 of the fishermen now catch 100 fish easily. Basically leaving the other 8 jobless. What does this mean? UNEMPLOYMENT!? Suddenly 80% of the island lost their jobs... but wait... the fish are still being caught... The society isn't less wealthy... it is more wealthy! Why? Because now these 8 people are freed up to do more and better things. If you look at a person as a resource they are now resources that are freed up. So now 2 of the 10 can catch all the fish, not 1 of the remaining 8 can go to another island to catch more fish, 1 can go learn a foreign language, 1 can open a business, 1 can do this or that. The society explodes in terms of wealth! It is tough to tell someone who has just lost their job to outsourcing or something else that they are now a freed up resource, but if they can see the big picture it will make sense. They can work on becoming more valuable themselves!
#2. The current real estate market. (Commerical mainly) and why to get out of it!
Take a look at farming in the U.S. at one point land was a very scarce resource because we needed food! Well what happened? A "Net" was created in the farming industry. New technology increased production 10 times! So now food that was once produced on 10,000 acres could now be produced on 1,000 or less! What happened? The land became a readily availible resource!
So here is the clincher: distribution has changed in the commerical market. I see this all over my area, strip malls and commercial spaces have sat empty for many months, and for some, years! Why? The enormous amounts of space are no longer needed. Look at large clothing companies: Gap, Hollister, etc. They have been decreasing the size of their stores... why? Because they are failing? No! It's because they are becoming more effective! Instead of selling $100 per square foot of a store they now sell $500 per square foot of store! Because of distribution costs being lowered, they don't need to stockpile inventory, they can move product quicker, and thus the stores become much more effective.
What does this mean? I believe Pilzer when he says it's time to get out of commercial real estate (even though I'm not in it, take that for what it's worth). Stores will start downsizing and becoming more and more effecient. Less is more in this case.
I could go on and on about it because my mind is so full right now of thoughts and possibilities it's ridiculous.
What do you guys think about this?
2 Big Lessons from Paul Zane Pilzer:
#1. There is no such thing as a recession
What is happening during a so called "recession"? Technology is improving. He uses a great example: 10 fishermen are on an island. They all catch 10 fish a day for a total of 100 fish. Someone comes along and invents a net. 2 of the fishermen now catch 100 fish easily. Basically leaving the other 8 jobless. What does this mean? UNEMPLOYMENT!? Suddenly 80% of the island lost their jobs... but wait... the fish are still being caught... The society isn't less wealthy... it is more wealthy! Why? Because now these 8 people are freed up to do more and better things. If you look at a person as a resource they are now resources that are freed up. So now 2 of the 10 can catch all the fish, not 1 of the remaining 8 can go to another island to catch more fish, 1 can go learn a foreign language, 1 can open a business, 1 can do this or that. The society explodes in terms of wealth! It is tough to tell someone who has just lost their job to outsourcing or something else that they are now a freed up resource, but if they can see the big picture it will make sense. They can work on becoming more valuable themselves!
#2. The current real estate market. (Commerical mainly) and why to get out of it!
Take a look at farming in the U.S. at one point land was a very scarce resource because we needed food! Well what happened? A "Net" was created in the farming industry. New technology increased production 10 times! So now food that was once produced on 10,000 acres could now be produced on 1,000 or less! What happened? The land became a readily availible resource!
So here is the clincher: distribution has changed in the commerical market. I see this all over my area, strip malls and commercial spaces have sat empty for many months, and for some, years! Why? The enormous amounts of space are no longer needed. Look at large clothing companies: Gap, Hollister, etc. They have been decreasing the size of their stores... why? Because they are failing? No! It's because they are becoming more effective! Instead of selling $100 per square foot of a store they now sell $500 per square foot of store! Because of distribution costs being lowered, they don't need to stockpile inventory, they can move product quicker, and thus the stores become much more effective.
What does this mean? I believe Pilzer when he says it's time to get out of commercial real estate (even though I'm not in it, take that for what it's worth). Stores will start downsizing and becoming more and more effecient. Less is more in this case.
I could go on and on about it because my mind is so full right now of thoughts and possibilities it's ridiculous.
What do you guys think about this?
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