We Need Resourcefulness - Now More Than Ever
I ran into a friend at the gym who is a Brown University alumnus. The discussion centered on sports. He said that he had played varsity soccer at Brown. As we know, soccer is not America’s most popular sport. It certainly is in Europe and South America. He said that the Brown team was awful. The coach had an idea. He lined up games in New Bedford, RI. with the local kids. Brown is located in Providence, RI.
New Bedford has the largest Portuguese population in RI. Soccer is a big part of the Portuguese culture. The Brown team showed up in their fancy uniforms. They did their warm up routine. The New Bedford kids gawked and laughed at them. The New Bedford kids won the first five meetings. The Brown University players started to get the hang of it.
That year, Brown took first place in the Ivy League soccer competition.
This year, I joined a new tennis game. When the players told me how many lessons and games they regularly take and play, they intimidated me. They’ve gone to tennis camps in the US and Caribbean. When I saw them play, it further worried me. They put the ball everywhere I wasn’t and their spin shots were wicked. Some drives came over the net like bullets hit me in the chest and arms and I have the black and blue marks to show for it. On the other hand, they kept giving me pointers. All of their calls were fair. They couldn’t be nicer, but after two hours on the court with them, I had my tail between my legs. I’m not in their league yet, but I am losing by less. My game keeps improving if for no reason, I don’t want to embarrass myself. I even get to win an occasional set.
The world is facing much bigger issues which will require resourcefulness and then some.
Global warming has ski resorts in NJ, PA, CT and NY are in trouble. They are getting less natural snow so they have to make it. Making snow is energy intensive and costly. Skiers don’t like surprise rocks and grass patches. For years we have kiddingly said, “If you paint rocks white, easterners will ski them.” Some ski mountains have installed water parks, rides and other diversions for which I have no interest. That means that if I want decent skiing, I need to take the 6 - 8 hour drive to central and northern Vermont, New Hampshire, Maine, New York and elsewhere. After a while, that drive gets old. Another alternative is to fly out west, but they are having similar problems. In Europe, it is even worse. Half the glacial ice in the Alps has already melted, threatening a $30 billion ski industry.
Skiing is like farming. You are dependent on the weather. I don’t like businesses which are out of my control, particularly the weather variations. Just ask the farmers.
If you told me a year ago that Pacific Gas & Electric, California’s largest utility would file for bankruptcy I wouldn’t believe you. It services 16 million people. Hot weather and drought made much of California’s forests into tinder. It didn’t take too many equipment malfunctions to convert huge acreage into infernos. Entire towns were wiped out. People died. PG&E's liability is estimated in the billions, far exceeding their insurance coverage.
Utilities are normally considered the safest investments. They have a captive audience. They generally pay regular dividends.
If you were to ask me about a real growth industry, I would say sea walls. Weather patterns are changing. Ocean levels are rising and the ocean is lapping at Boston, New York, Savannah, Miami and many other cities.
Joe’s Stone Crabs in Miami s is surrounded by luxurious condominiums. Go to Joe’s Stone Crabs in Miami and even without storms, tides lap against Joe’s and surrounding buildings. Joe's has another problem. Warm water, fertilizer run off and resultant red tide has wiped out much of the stone crab harvest this year and Joe’s has had to raise prices and limit supplies. Fortunately, the red tide is subsiding which is a good sign for next year’s crop. Yum!
The Chavez/Maduro regimes in Venezuela has veritably wiped out much of the oil production in the country which has the world’s largest oil reserves. The Venezuelan oil sector is facing near collapse. Venezuela produces tar heavy crude which needs to be blended with US, sweet, light crude. The US has become the world’s largest oil producer much coming from the shale fields in Texas, New Mexico, Montana and North Dakota as well as parts of western Canada. US crude is sweet and light, but it needs the Venezuelan crude to blend with. A new political regime and about $20 billion will be needed to further increase Venezuelan production.
The moral of this story is that the other guy’s misfortune can also be yours. We can only hope that the opposition led government overthrows the present one soon. It looks like just a matter of time.
Our experience tells us stuff is going to happen. Much is out of our control. That is why we need to be resourceful in ways we never expected.
What do you think?
Ira Friedman