Transitions

I haven't posted in a while since I was in the process of changing jobs and moved my base of operations from DC to NY. I'm still getting settled in and it will take a bit longer to get fully operational, but I've worked out most of the major issues and will be able to increase my productivity on the new position.

Going through a transition is always somewhat stressful and since I maintain the economy is doing just that, the country as a whole is undergoing stress. This is not the first time a society has had to adjust to changing circumstances and generally, the stress results in all sort of dire predictions.

What is true is that those who recognize and adapt to the change will do better than those who don't.

Going into earnings season again we will see if American companies can maintain their profitability as the recovery continues to sputter along. There will come a time at some future point when the recovery will speed up but before that point there is still issues that need to be resolved as we finalize our transition from a manufacturing based society to a technological service economy.

That is quite a simplification of what is happening but I think it is reasonable accurate. I'm also quite sure that companies will continue to be profitable as the inventory, store and employee reduction cost savings will allow them to make money on reduced volume. Americans have less to spend and will have for the foreseeable future. Successful companies have recognized this and adjusted their business models accordingly.

I'm not sure if Wall Street has accepted this changed reality and I expect to hear how companies are still disappointing with gloomy forecasts and missed sales goals while becoming ever more profitable. However, profitability is what increases the value of a company. I'm a big fan of it.