Sorry, We're Closed!, ADP, PMI, Confidence, Billionaires, Gold, and Who was Gordon Bowker?
This Week, Economically Speaking
Well, most of the federal government is closed.
Critical services are open. The TSA and air traffic controllers are working, but as long as a budget or stopgap spending bill is not passed, no payroll checks are cut. At this point, some key individuals are working on deferred income.
Some reports are not coming in, such as initial jobless claims, construction spending, and factory orders.
Congress continues to collect paychecks, though. Sigh.
Non-government numbers are in, though…
ADP – the payroll folks – saw its customers cut 32,000 jobs.
This is the third month out of the last four where job growth was negative.
ADP's chief economist stated “… the hiring momentum has slowed.”, punctuating the fact that economists are masters at telling you what happened.
The S&P Purchasing Manager’s Index is not tabulated by Uncle Sam.
The headline number came in at 52.0, down from 53.0 the month before.
While production growth slowed, the outlook remained strong as firms were able to hire to fill open positions for anticipated future growth.
Input prices (material costs) and output prices (finished goods prices) both increased, but not as fast as in previous months.
Finally, consumer confidence, as measured by the Conference Board, dropped to 94.2, down from 97.8 the previous month.
This puts confidence about even during 2020-21.
Yeah, I’m not excited about that.
Fewer people thought jobs were plentiful: 26.9%, down from 30.2%
Oddly enough, confidence rose for consumers under the age of 35, but declined for those over 35.
Boomers are cranky.
So, jobs are getting a little softer – that means it will be a little easier to find employees. The offset is that folks are leery of leaving their current job. Purchasing managers are cautiously optimistic, but the consumers are a mixed bag. Again, no clear signals on which way the economy is going from the data.
Millionaires and Billionaires – as Bernie would say.
There are 1,135 billionaires in the USA. Didn’t that used to be the number of millionaires?
The total wealth represented is about $5,700,000,000,000.
255 are in California.
50 are from five families: Walton, Koch, Mars, Pritzker and Cargill-Macmillan.
Sometimes it pays just to be born, kind of like a lottery ticket.
More than 150 are women, including Selena Gomez and Taylor Swift.
The oldest is 104 and is still the Chairman of Mercury General, the parent of Mercury Insurance, among other companies. I’ll be writing about him one day – he’s a stud.
Only 110 came from tech.
Folks, it’s never too late; many of these folks are self-made. You can be too.
“The best time to plant a tree is 25 years ago. The next best time is now.”
Gold
Given the disruption to pretty much everything in the world, some folks are buying gold to offset the volatility in the world.
Just to be clear, I do not advocate this.
That said, about five years ago, I bought a whole 2 ounces of gold for $3600 just for the heck of it.
Gold closed on Friday at $3881 per ounce this past week, a roughly 115% increase in five years.
Wow! Awesome, right?
Let’s add some perspective to this. In roughly the same time frame:
Google is up 242%, Amazon is up 42%, Intel is down 18%, JPMorgan Chase is up 259% and BofA is up 135%.
So, no regrets. Unless you have Intel.
But that’s all part of a balanced portfolio. BTW, there is nothing balanced about those five stocks. I just picked five out of my – never mind.
Pro Tip: October is generally NOT a good month for stocks. Just sayin’.
Who was Gordon Bowker?
Gordon Albert Bowker was born in Alameda, California, in October 1942, while his father was serving in the Navy in the Pacific on a submarine.
In January of ’43 the submarine went down; father and son never met.
His mom moved to Seattle to be near her parents.
After almost finishing a Poli Sci degree at the University of San Francisco, he moved back up to Seattle, where he worked various jobs, started an ad agency, and travelled.
And he had a hankering for coffee, just not Folgers or Hills Bros. He’d make runs up to Vancouver to get good coffee beans. Finally, with a couple of friends, Jerry Baldwin and Zev Siegl, they opened a coffee store and named it after a character in Moby Dick.
Not a coffee shop, a coffee store. They sold beans, grinders, gadgets, filters, and everything the coffee snob would need to make a good cup of coffee.
It was March 1971. Economically, NOT a good time to open any sort of consumer store in Seattle.
“It wasn’t like we wrote a business plan or anything like that. We just started doing it.”
They each invested $1350 and borrowed $5000 from a bank and found a spot near Pike Place Market.
They trained with Alfred Peet, at Peet’s Coffee in Berkeley.
But they didn’t brew their coffee; they just sold it. However, they did hand out samples.
They expanded and added stores around the city, buying Peet’s Coffee along the way.
In 1981, a fellow by the name of Howard Schultz joined them and then left in 1985 to form Il Giornale, a coffee beverage company that Bowker and Baldwin also invested in.
In 1987, they sold their chain of six stores to Schulz and some investors for $3,800,000.
The name of their chain?
Starbucks.
Schultz kept the Starbucks name, and Baldwin got to keep Peet’s.
Bowker had also started and owned Redhook Ale Brewery, and sold it when it got too big for his taste.
He then enjoyed spending time with his wife and daughters and travelling the world.
Said longtime friend David Brewster:
“I think that he decided early in his life that he would master business, and then later in his life that he would master the art of living.”
Gordon Bowker passed away in August at the age of 82.
People talk about how chaotic the business environment is. As a business owner, chaos is part of your life, but, in the words of a business owner I respect tremendously, “This too shall pass.” Many businesses get started at a ‘bad time’, but they end up doing well because the competition is focusing on the chaos while the newcomer is focusing on growth. There’s the ‘f’ word again: focus.
Just keep swimming. But don’t forget to master the art of living.
