February 17, 2009
People who are in the service & repair business are seeing marked increases in their demand for their goods and services. More and more people are choosing to go the repair route rather than buy new. As the recession continues to worsen, this trend will rise even more.
The repair business is seeing growth in several areas. Many car dealerships have been able to offset slumbering sales by seeing an increase in car repairs requests. Simply put, auto repair is booming. Also, leather repairs shops (Cobblers) are seeing the greatest growth in their cobbler business in well over 30 years. This is because many people are choosing to get their dress shoes, boots, belts, purses and other leather goods worked on rather than getting a newer model. However, the growth in this business will extend to other areas in the near future.
One of the most popular areas will be in computer repair and bigger appliances. For those looking to find a quality side business, these are good places to look. Both will be in high demand for the next five years and you can usually get the education you need in 6 months to a year’s time. For example, you get the appropriate education by going to a vocational school or working as an electrician apprentice. With the rise in recent demand, you should have little difficulty finding a mentor. For computer repair, many people have been self taught and if you have an interest in this area, you can find this business to be very lucrative as a home computer has become a necessity for most people.
If the repair business is not your cup of tea, another growing area is consignment. A number of clothes retailers have already made some accommodations to their sales floor to compete. These changes have been the inclusion of used clothes sold on consignment. As the recession continues to squeeze people’s budgets, you will see more and more value shoppers looking for these deals. A business opportunity has opened up for those who deal in consignment. You can expect consignment will carry over from used clothes, appliances, and even toys.
Naturally, these areas will benefit discount retailers and those who currently can gain access to used goods at little to no cost. However, these are small barriers to entry that many enterprising people can overcome. One easy way to get goods on the cheap is to visit garage sales, estate sales, and flea markets. Popular items in these venues can include dvds, books, video games, and toys. Many of these items can be found at garage sales and estate sales and sold at flea markets or online through your own site or through sites like Amazon.com, Ebay.com or Ebay’s Half.com.
As you can see the service & repair business is alive and doing very well. Maybe it is time for you to give it a closer look.
February 13, 2009
More Layoffs?……….Am I next?
This is the question more and more people are asking themselves as the recession continues to worsen and people read about another wave of layoffs. Naturally, this causes everyone to wonder exactly how safe their own job is and to wonder about the bigger more general question: What Makes A Job Recession Proof?
With this thought in mind, we have put together a few criteria that can help you determine whether your job will likely be recession proof:
1. It offers vital human services or goods.
If your job or business offers vital human services or goods, it will be more likely to be recession proof. Vital human services or goods means giving must haves for people. This includes things like food, utilities, gasoline, repair services or it provides a cheaper viable substitute. For example, the use of bicycles or motor scooters for transportation over cars because of the cheaper prices involved.
2. Not strongly connected to economic cycles.
This means the less seasonal or connected it is to other factors, the more recession proof it will be. For example, buying new cars is often curtailed during tough economic times. In this case, many people will put off buying cars which will hurt car dealerships and all jobs within it.
3. No impact by foreign business competition.
Many people fail to realize that many jobs can still be outsourced abroad. For example, Warner Bros recently caught fire from the Obama administration for outsourcing a number of jobs to India. However, the reality is many jobs can be outsourced. The jobs that are less likely to be outsourced are service related jobs that are tied directly to local communities. All other jobs are at some risk of being outsourced.
4. Resistant to tightened budgets or less consumer spending.
Basically this point goes: if the budget tightens, will you stop buying that service or good? If the answer is yes, the business or job is not recession proof. Although many businesses will see people cut back on the usage of products and services, there will be some businesses that people will still pay for even when their budget thins. These essentials will include things like medical care or groceries where people really cannot afford to live without them.
5. It has done well in past recessions and depressions.
One of the best predictors of how your job or business will do is to look to past recessions and depressions. If it has done well in the past, odds are good that it will continue to do so in the future. However, recognize that this criteria requires it do well in “all” recessions and depressions. This is the truest litmus test because it shows the business or job survived again and again.
But besides our analysis above, the real question remains what do you think?
Is your job safe? Tell us why or why not?
February 11, 2009
Sin stocks or vice stocks are publicly traded stocks that deal in the main vices. These include alcohol, gambling, tobacco, defense, and adult. In past recessions, big stocks in these areas did very well. The conventional wisdom was that even when times got rough, people would still squirrel away money for their vices. Fast forward to the present recession. The vast majority of these stocks took very big hits in 2008. Here, is a quick rundown:
· Diageo (DEO) is one of the largest providers of spirits. Its brands include Johnnie Walker, Guiness, Captain Morgan, and a few others. It saw its stock price drop from a high of about $85 to a $55 stock price at the present.
· Anheuser-Busch (BUD) was one of the few bright spots. They actually were one of the few that improved. The stock took off in April 2008 from 47.98 to 68.58 its last trade in Nov. Unfortunately, it was bought by private investors and is no longer available to the public.
· MGM Mirage (MGM) has seen its stock price drop from 61.99 down to 5.95.
· Las Vegas Sands (LVS) has seen its stock price drop from 73 to 3.80.
· Wynn Resorts (WYNN) has seen its stock price drop from 100 to 30.
· Shuffle Master (SHFL) has seen its stock price drop from 9 to 3.
· International Game Technology (IGT) has seen its stock price drop from 45 to 10.98.
· Phillip- Morris (MO) was up at $70 in April 08 and has now fallen to $16.81.
· British American Tobacco (BTI) has dropped from $80 down to $55.75.
· Rick’s Cabaret (RICK) has dropped from $25 down to just above $4.
· Playboy (PLA) traded at almost $9 in Apr 08 but is now at $1.67.
Now, as you can see if you invested in sin stocks in 2008, you would be hurting along with the rest of the market. However, now there is some talk that these stocks have trimmed their fat and can only go up from here. Should you invest in them now?
We don’t think so. There is still more bad news on the horizon and things will have to get much worse before these sin stocks to really be a good investment. Although you might be able to hand pick a winner or two among them, we suggest to pass on them for the near future. Better to put your money in other investments than send it into the stock market now.
February 9, 2009
As sales revenue declines continue across the country, this will start to show a direct impact on our states and local governments. The states that will be hurt the earliest will be states that do not get revenue from a state income tax. These states include Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. In addition, New Hampshire and Tennessee could be added to this mix because they only tax income for tax dividend and interest income. These states and their corresponding cities and municipalities should be hit significantly hard by the fall of next year. This is the time when most budgets are prepared. The results should be swift, but they will come in the form of layoffs and reduced services to their citizens.
Income Tax States Will Not Be Spared
Also, at first glance, it might seem that states that have a state income tax might get a small reprieve since most of their income is not derived from sales tax. However, this can really only be determined looking at a state by state basis. For example, Oklahoma has a state income tax, but it also carries one of the highest sales taxes in the country at 8.1%. Therefore, it and a number of other income tax states with a high sales tax rate will be impacted almost immediately along with the other non income tax states. The ones most likely to be impacted quickly in this group include Louisiana (8.7%), New York (8.25%), Arkansas (8.2%), Alabama (8.15%), and California (8.0%). Still, even the remaining income tax states will be impacted relatively soon thereafter because the income tax will have to be adjusted to accommodate the declining property values in those states. With no extra money to buy homes, property values will decline in these states. The result will be less potential income for the state to recover although there will be some delay of a few years for the tax appraisals to catch up with the market demands of the homes.
These trends show a very troubling picture for our state and city services. This will negatively impact people in a number of ways including reduced resources for schools and hospitals and streamlined services for things like garbage pickup and road repair. Still, you can expect to see a number of cities try to find ways to earn back this income. For example, one likely area will be in code and traffic citations where more tickets are given out. Another area where changes may be made is in reducing the level of services, such as changing from picking up trash only once a week compared to two times in the past. Finally, you will see some governments make wage cuts for certain positions.
As the recession continues to worsen, states and city governments will be less equipped to help those who need the help the most. Some indications of this are already occurring. (See unemployment benefits ). When they are unable to help these groups, the recession will begin to turn into a depression. As consumer spending continues to decline with each coming cycle of layoffs, each state and city government will also be more negatively impacted in turn. This vicious cycle will become the norm over the next few years. The smart investors and consumers will notice this trend early and start taking action now.