The Most Likely to Make a Move

It stands to reason that if you follow the market you will make money but never really get ahead. In the last entry we discovered the many layers of manipulation a person in the “know” can exploit. But I saved the direct implications of how to get into position to be ahead of the market for this entry.
Being ahead of the market is really a feat of two accomplishments. The first is, knowing the market you are getting ahead of inside and out, the second is, knowing the people/industries that will be catapulted to the front of the market. If this sounds impossible you probably need to understand the market a little better, or at least the market to which you are closest. You do not need a doctorate in economics, finance, or diplomacy in world affairs to specialize in a market you just need time in that market and reflection on how the market has moved you personally.
Most people believe that commercial real estate, stocks, bonds, and other investment devices are difficult to master, and to an extent these subjects can be heady and intimidating: if you are getting into examining the subtle influences and changing factors and the cross application of one market to another in the micro economic analysis and how to teach that to others, you may be right in your thoughts. That’s a trunk load of work and you probably won’t get rich doing it. The macro analysis is a bigger picture that may be a good place to start to help you zero in on a strategy that better suits your location, situation, condition and knowledge.
Most macro influences are accessible through the news and magazines. Begin to follow and understand the “big picture” of population growth, job layoffs in an area, local government policy and others to bring in more business. The types of business the Governor, the Mayor, or your local city council, are trying to entice by enacting legislation. A new trade agreement with Columbia or Costa Rica can point out the types of materials we are trying to import or export. But what you and your children use the most in every day life, what you are becoming more and more dependent on is a better clue. You can pick up a few macro-economic clues and use them to examine your locality, or to find a locality that will grow as they race to exploit the new developments for tax purposes themselves.
The local level runs after the tax dollars of the new developments. They begin to look for people with ideas on how to exploit the new legislation, trade agreement, government enticement or whatever is the headline of the year. The irony of the relationship is that most council people are acting by directive from a higher level and to enrich their town and district so they can be re-elected. They often don’t know their role as marketers for the economy, so listening to a platform speech or two written by a researcher at the local level can often give clues of future cottage industries. They know their office has power yet they rarely know which topics will get them elected. They throw a platform together with a hodge-podge of positions and as they campaign and find out what the market wants they hone in on it as talking points, but they rarely have any idea about how they will deliver what they promise. This is how a nation, state, town or city can be overrun by investors and outside influences so quickly.
Not only are the politicians trying to get educated and chose wisely on the issues that pole out as relevant to the masses they are trying to open the door to those issues to create jobs before they understand them. While the governing bodies race to enact legislation growth and for tax dollars they rarely set a growth cap until it is far too late. So investors and developers develop ideas to help the governing bodies entice entrepreneurs, and thereby the tax base, and they will begin rapidly building businesses, housing, office space, manufacturing, retail, industrial, etc with no idea of how much and how many will actually be needed for the “emerging market.”
The local result is some council member believing, or being sold by an investor/developer, all the legislation and the headlines that the emerging market is the town’s salvation. This is how an entire town may turn into a dominated market that will make it very prosperous short term, but irrelevant as the newest generational trend emerges.
Years ago in the 1950’s, 1960’s and 1970’s the car was king in California. We still have a car culture in California, but it is more superficial. In the early years people washed, waxed and worked on their own cars. Car clubs thrived and some towns became central locations for after market modifications, parts, paint, fixing and detailing. This occurred in mostly working class towns where it was not uncommon to find a dad snarling at a child, or two, from under the car in the driveway to grab them an adjustable wrench. A book called Out On the Porch by Reynolds Price decries the loss of the porch culture of the 1930’s and 1940’s. The communal advent of the porch wasn’t lost most people just moved to the driveway, the front yard or the street to talk while they worked on cars. The macro-economic indicators said: “build/buy/invest” in auto related vehicles. (Pun intended) Therefore, the following occurred; Gas stations, mechanical shops, parts shops, wrecking/salvage yards, parts manufacturers, and so on. And as automobiles became more reliable and gas more plentiful, restaurants, street retail, motel and hotel and so on. I know it’s easy to look back, but what about what we are in the middle of? Green Resources, Computer Technology, Global Economy, Free Trade, a major election just to name a few. Any local investor/resident can not only see what a reasonable development will be, they can begin to push the emerging market edge and lead the market. How many times have I heard a person say; if I knew what was going to happen with stock ABC, or in town XYZ back in 1960 I would have led the charge and made millions. This is sort of a lie because that person probably did not have the resources or contacts to exploit the market move they identified, which is exactly what we will discuss later.