My guest today is Blake Anderson. Blake is the owner of Mogollon Water Management. They specialize in grant funding, operations, and maintenance of rural Arizona public water systems. Blake also serves as the Financial Pastor of theCHURCH of AZ (tcaz.us), which is my home church in Pinetop, AZ.
by Blake Anderson
Remember the last time you rode a roller coaster? That last climb before the big drop? How about the sound? The suspenseful silence of your fellow riders. The rhythmic click click click of the carts ascending the track.
It seems like an eternity.
Your stomach starts to tense. Your hands start to sweat. You know what’s coming – but all you see is the sky. As the last few clicks pull you to the apex, you’re finally lurched forward into free fall as the screams of the front passengers reach your ears.
A lot of us have a similar sense about our economy. An eerie feeling that we are just a few clicks away from a fall. That we are in or at the forefront of a recession. That there are several things clicking the coaster up the tracks. The lurch of the stock market, rising interest rates, tech layoffs, crypto collapse, and inflation marching steadily forward.
How do you feel about the next 12 months? Are you afraid, defensive, waiting anxiously to see how it will affect you? What are you going to do?
Whatever happens next, today I’d like us to consider why we fear a downturn. Historically, every decade or so our economy experiences at least two consecutive quarters of decline. So why the anxiety every time that it happens?
Declining consumer confidence starts a spiral in the velocity of money. This leads to decision making with limited data. You may experience a drop in sales, loss of major clients, rising costs, and vendors who fold.
Today I’m encouraging us to embrace the fall.
The Old Testament book of Ecclesiastes chapter 3 starts with this verse, “There is a time for everything, and a season for every activity under the heavens: a time to be born and a time to die, a time to plant and a time to uproot, a time to kill and a time to heal, a time to tear down and a time to build.”
Our economy has always been cyclical. This is a good and a natural process. Unchecked growth leads to market complacency surrounding standards of performance and added value.
Think about the dotcom bubble of late 90s. An abundance of zombie companies with no real substance. Think about the subprime mortgage hedges a decade later, or the FTX scandal that has just unfolded.
Every organization can appear healthy during periods of unchecked growth. But, as Warren Buffet said, “when the tide goes out you get to see who is swimming naked.”
If you’ve planned well and kept your “clothes on” as the tide goes out, you will find that some of the greatest opportunities lie ahead. Down markets are the best time to pick up new capital as the overleveraged flood the market with assets to cover losses.
Scarcity results in innovation. Scarcity forces us to evaluate priorities, recognize our weaknesses, and sharpen our focus. When whale oil became scarce oil drilling was developed. High oil prices in the late 2000’s resulted in serious electric vehicle development.
Be the one who recognizes the opportunity in the midst of panic. Focus on the upsides. Find new openings in the marketplace, look for top talent that is available due to layoffs, and keep building reserves for that opportunity yet to present itself.
If you feel the need to react, remember – be patient, be calm, and enjoy the ride.