Value of Foresight
Updated: Oct 25, 2018
How much do you as a business owner having a person on your team that can add to foresight on the economy to better guide your strategy? Over the last 12-18 months we painstakingly documented our belief that although the tax cuts would spur economic growth they will come at a price. That price we outlined many quarters ago would be a reversal of monetary policy (higher rates and reduction in asset purchases by central banks) tied to higher inflations in part tied to where we were in the business cycle, but also tied tight labor markets. With the extensive use of debt & leverage by gov't (to fund deficits), corporations (to fund buy backs), and consumers (to fund student & auto debt and to lesser extent mortgages) the reversal of monetary policy would negate some of the positives of the tax cuts. We are finally at that point where the "monday morning quarterbacks" are singing the song we sang over a year ago.
We documented such thoughts repeatedly:
1) Peak in Ecomomy in Feb 2018 (https://www.charlotteconsultantservices.com/news-update/economic-inflection-point,
2) May & August 2018 when warning of a housing slow down that began in early 2018 (https://www.charlotteconsultantservices.com/news-update/realestate-better-prepared-for-downturn, https://www.charlotteconsultantservices.com/news-update/ending-housing-boom-complacency-planning),
3) In Summer 2018 on warning of peak margins (https://www.linkedin.com/feed/update/urn:li:activity:6425735191712583680)
4) Most recently as economic risks mounted Fall 2018
I don't point these things out to gloat but to reiterate the importance of what we do and why we do it. These articles/posts are aimed to better prepare businesses in inflection points in demand dictated by the macro economy which we then use as input to specifics of your business. They are also aimed at generally helping to better coordinate personal & business finances. Besides Economics we use Accounting & Financial skills that then optimize the 6 resources of a business (money, time, capital, assets, labor, marketing to maximize profits. I'll reiterate again the question: How much do you as a business owner having a person on your team that can add to foresight on the economy to better guide your strategy?
Fundamentally, we believe through planning your business can better adapt to the changing business climate so rather than being hurt by it you can benefit from it.
And that's the goal of all of this.