Risks vs. REWARDS
Re-Shoring – Separation or Divorce?
Both investors and business heads dislike uncertainty and economic turmoil because it complicates making good management decisions. This spring we have witnessed an amazing amount of unimaginable events! Here are several that occurred last week:
- Daily there was story about a shop keeper protecting their livelihood/store from protesters/looters/thugs by standing guard with an AR-15. In contrast, those shop owners without an AR-15 got wiped out. Tragically, many of the latter group watched their entire life’s work and the source of feeding their family be destroyed. Please forward this information to a Virginia Democrat politician owned by Mike Bloomberg as they seem to be confused over “Who needs a gun, especially an AR-15?” They need clarity.
- Did you see the YouTube video of the woman in Chicago who was literally raving mad about a store owner standing guard in front of his store with an AR-15 (or she said Ak-47)? She was upset that she could not loot his store, how dare he use a gun to protect his store, did he know that guns are illegal in Chicago? She said she was going to complain to her brother who is a Chicago cop. There was no mention as to whether she thought looting, otherwise known as theft, was illegal in Chicago.
- To our governor and mayor I dedicate the destruction of the statue to Columbus by the same folks demanding the removal of the Civil War statues on Monument Avenue who now demand “No more colonizers”. To “never waste a crisis to build your political base” by pandering to the mob, perhaps Northam and Stoney can propose legislation to give all of Virginia back to Chief Powhatan announcing it at the next demonstration/protest/riot! Or maybe they will put their Big Boy pants on and realize no one can ever satisfy a mob.
- But the crowning achievement is the Democrat politicians across the country demanding and agreeing to abolish the police! Really? Have you noticed Seattle, Washington? EVERYONE will need an AR-15 and 1,000 rounds of ammunition. With over 100 Million households in the USA, if each household buys an AR-15 and ammo, forget the PPP and QE because those purchases will boost our economy by themselves. AR-15’S will be selling like hot cakes. Can you see the signs “Get your AR-15 & ammo here!” No banners, these will be flashing digital signs. “Buy now before prices increase!” The best move …buy some stock in the companies that manufacture AR-15’s and ammo so that you maximize the benefit.
Talking about economic growth, last week’s job report demonstrated the beginning of the economic recovery from the Wuhan Virus shutdown. Instead of a projected 2 million jobs lost and an unemployment rate of 20%, the Bureau of Labor Statistics (BLS) reported a job gain of 2.5 million and a reduction of unemployment to under 14%. Lots of pain left, but a good start.
I wonder if the BLS included the rioters/looters in their job count numbers? I am not sure which was more tragic, the destruction of private and public property along with the lives lost to rioters/looter/thugs or the elected officials that deflected the blame to the police? Weak-kneed elected officials are enablers, the rioters deserve to be in prison and fined/sued for the damage they did, and the police deserve increased pay along with a chorus of “Thanks”.
How about those NYC Guardian Angels! I am still amazed that the previous week it was 6 Guardian Angels versus 300 looters and the Guardian Angels prevailed! The founder said – “We do not back down”. Maybe he should be the Mayor of New York City. Governor? President?
What has become obvious is that many of our elected officials are huge egos attached to over-sized mouths controlled by pea-sized brains. Who is worse, our governor and the city council members of Richmond or the protestors that think removing a statue to Robert E. Lee will improve their lives? Really? Has anyone talked to them about the perils of self-delusion? I recommend they receive professional counseling. History is critical because we learn from it, but it is unchangeable.
All of my 48-year career I have experienced discrimination from multiple parties including the Federal government because I am a white male. Additionally, for my entire career most folks I met from outside the South upon hearing my southern accent deducted 30 points from my IQ. When they saw my white face, they also assumed I was a racial bigot. Neither is true. I used to be offended, but I matured. To those who are so offended about everything, here is a news flash – Life is not fair. Get over it. If you want something – Go to work.
A professor of Russian literature was quoted in the WSJ on Saturday, June 6, that there are significant parallels between the attitudes of the “Elitists” in Russia prior to the Russian Revolution that led to communism in that country and the attitudes of the “Elitists” in the USA today. From his article it seems the “Elitists” were/are upset that they are the most intelligent folks but not the wealthiest folks. I think that feeling is called jealousy. My parents raised me that jealousy was a violation of the Ten Commandments and therefore to be avoided. Their solution was for me to go to work, earn the money I needed, and ignore distractions.
How does this relate to the land market?
One enormous benefit of the Wuhan Virus is that the Chinese Communist Party (CCP) has been exposed for what they truly are – Communists. Are you confused that some of our leaders are surprised?While our USA Elitists tried for decades to hide the facts, the truth came out because Trump demanded that the Chinese stop cheating and stealing. That is what an adult does when a child is misbehaving. After four decades of lies, corporate theft, and the USA playing the village idiot to the CCP the truth became obvious. “Better late than never” my mother used to tell me. Amen. Amen. Amen.
My experience in business and life is that if I can identify the most important question in a situation, normally the answer to that question brings tremendous clarity to the situation. Here is that question for the Wuhan Virus:
Given the facts that at the very least the CCP covered up the severity of the Wuhan Virus for at least 60 days while encouraging its spread globally, bought up the global supply of personal protective equipment, plus tried to buy the bio-tech companies with anti-viral therapeutics, IF the CCP offered to give you a dose of their vaccine for Free OR you had to wait one year for the USA vaccine and Pay For It – which vaccine would you accept? Me too. Sorry CCP, I prefer mine made in the USA. I am “fussy” about Chinese stuff.
My point is that I believe all thinking people around the world feel the same way. And not just about medicines. Japan has already passed legislation to force their manufacturers to bring their operations back to Japan. Trump and his advisors are talking about changing our tax law to allow companies bring production back to the USA from China to write off in the first year the ENTIRE cost of re-shoring. Only an idiot or politician owned by China would vote against that idea.
Meanwhile, our manufacturers have rediscovered the downside to “just in time” production. The supply chain was a little too lean. There are real benefits to having some additional material and product in the supply chain. Black Swans are coming a little too frequently for lean supply chains. I have an MBA but believe that MBA’s need to be chained to logic occasionally.
These forces combined with the phenomenal shift in the retail market being “Amazoned” and grocery stores evolving from America’s well stocked pantries to food distribution centers will drive growth in the industrial markets for the next decade. Amazon is already looking for smaller “Last Mile” distribution centers. Others will follow.
The result is that manufacturing and distribution buildings will be built on industrially zoned land that is located near interstates and population centers. The exact demand for sites and buildings will depend on whether American companies completely exit China (Divorce) or keep some facilities in China and “expand” in the USA or North America (Separation).
Demand will surge in the industrial land market and the related construction will expand the USA economy. I believe the industrial land market will be one of the best investment arenas over the next decade. Increased demand in the face of limited supply means increased prices.
Do not be confused by those chasing popularity. “Where is the one who is wise? Where is the scribe? Where is the debater of this age? Has not God made foolish the wisdom of the world?”
(1 Corinthians 1:20 New Revised Standard Version, Oxford University Press)
Next week, more “REWARDS” coming from the Wuhan Virus. Capitalism builds wealth, socialism consumes it.
I serve an awesome God. Stay healthy,