Brian Beaulieu has served as CEO and Chief Economist of ITR Economics™ since 1987, where he researches the use of business cycle analysis and economic forecasting as tools for improving profitability. Brian has shared his highly valued research results via presentations, workshops, and seminars in numerous countries to hundreds of thousands of business owners and executives for the last 38 years.
There really is a monster under the bed, but it is still time to get out of bed and get ready for the day.
In this blog you will:
- Face the monster
- Give it a name
- Craft a plan to pacify the beast
The Monster’s Name Is Uncertainty
Our listeners tell us that the greatest uncertainties they typically contend with are economic in origin. They are:
1. “How can we know the recovery is not part of a 'false bottom'?”
2. “How does this relate to my firm?”
Together, these two questions comprise the first head of our three-headed monster. It is a familiar concern and one we expect to see at this part of the business cycle. Our credibility and numbers-based approach helps us with #1 above. Watching the status of the leading indicators, retail sales, new orders, and so much more via the ITR Trends Report™ will help you answer #1. Our methodologies applied at the microeconomic level provide the answer to #2. We will delve deeper into #2 at our September 24 presentation; sign up to learn more on that aspect of uncertainty.
The Monster’s Second Head
The monster’s second head is called PPC (potential political change). We don’t see PPC very often, because the timing of a presidential election and the business cycle must be aligned (George H. W. Bush’s reelection efforts come immediately to mind). Many people are already looking Uncertainty in the eye because we are in the early stages of a recovery following a natural disaster. This seems to have made the second head, PPC, arising out of the reality of elections this November, more scary than normal. A change in administrations and control of the Senate this November would likely mean we are all going to need to change some expectations, change strategies, and overcome new obstacles. Most leaders have had to do these things before. It is part of our past and part of our future. It is part of running a business. But it represents the potential for more change at a time when our lives have seemingly been turned upside down already.
ITR Economics is going to have a post-election webinar to present our views on the economic trend probabilities for 2021, 2022, and 2023 in light of the election results. Our advice right now is don’t make Uncertainty’s second head bigger than it is. We have seen that part of the beast before. You will overcome it.
The Monster’s Third Head
The third head is new. It is scary. It is brutal. And it is under the bed. It seems to be lurking. It has already hurt many of us. Its name is COVID-19. The third head is a natural disaster imposed upon the economy. Economic fundamentals will ultimately prevail, but the energy of the natural disaster must dissipate.
Tracking the Monster’s Third Head
We look at the COVID-19 trends every business day. Most of the businesses we work with will benefit from COVID-19 being relegated to history books, at least in terms of its pandemic status. We are going to look at some “hot spot” states for purposes of this blog. The best outcome at this point is a declining trend in each instance. Also, please note the lower fatality rates associated with the disease compared to when the medical community was first coming to grips with COVID-19 and the greatest at-risk populations were more heavily exposed.
Charts current as of September 14, 2020
Uncertainty is under the bed. Its third head is the scariest, but it looks like it is being tamed. A vaccine will surely help put the beast to rest. The best we can do at ITR Economics at this time is what we are doing:
- Tracking the trends every day to see if the beast is getting stronger
- Trying to create a trend analysis modeling technique that works with our methodology to better understand the beast and the potential for a much-feared second wave
It often helps to know the name of a disease or infliction being dealt with. Its name is Uncertainty. Control what you can because there are always “unknown unknowns” waiting to become the next head on the monster under the bed.