Labor Day Reflections

Cloudy 57F morning run looks like the state of labor. Today will be clear and sunny holiday. Skilled and service workers have shortages. Salaries are slowly rising, if your work is in demand.

The future is not clear. Trade war with China affecting businesses and farmers. Slowing economies around the world. Italy and parts of Europe are in recession may slow our economy. Businesses are investing and hiring carefully, not in an expansion mode. The next five years may be challenging. However when has life ever not been challenging?

Today enjoy your holiday and the fruits of your labor. Tomorrow reflect on what your best skills are, what to learn that would help you, and who you can better serve. Research which skills pay more. Careers are built on learning and trying new things.

Benefits of Age

America is a youth culture. Youth is revered and celebrated. Young “Influencers” are the rage to follow. Celebrities tend to be young and beautiful.

Youth is an advantage for creativity and strength. Young inventors and scientists often make impressive leaps of thought. Experienced inventors and scientists combine ideas and processes in new ways. 

Most people start careers with hard physical work. As we gain experience we use our minds more than strength. 

Benefits of Age:

• Comfortable in and knowledgeable with the world
• Patience with process - not much is accomplished in 3 months, but amazing what can be done in 10 years
• Switch from Task to Relationship modes depending on situations
• Relate better with more diverse people
• More empathy due to experiences
• Enjoy other people’s success as much as our own
• Manage health better (but more to manage)
• Faith is stronger and based on experiences

Do you see young inexperienced graduates leading teams or large corporations? No. They have not developed skills to lead people, resolve issues, or experiences to draw on. Encourage your coworkers to develop creative and leadership skills. 

After all we were younger and needed guidance, encouragement and confidence to flourish.  

 “When setting out on a journey, do not seek advice from someone who has never left home.” ~ Rumi

Strategy for China Trade War

No quick resolution for Trade Dispute with China is coming soon. Neither side is backing down and tariffs (taxes) may expand to Europe in the future.

What can your businesses do with a supply chains in China? 

Start evaluating your future profit potential for products: Not every product needs to be relocated. Your growth lines need to be addressed while cash cow products with limited future may remain untouched. Your options:

Split Production: Leave existing production lines to service China and Europe, and move production for USA to North, Central or South America. Savings from shipping and carrying cost of inventory mitigate costs of separate production lines. 

Redesign new models to manufacture in new locations: New products generate more sales and profits. Why move old tools and machinery to a new location? Redesigned products often cost less and be differentiated for higher margin markets. Combine functions on one computer chip, mold parts, additive manufacture, and design for automation to reduce labor.

Raise your prices: Cost of production does not relate to how much products sell for. Spend more on marketing to improve branding and customer awareness. Consumer choice is emotional, not based on lowest cost. Consumers know prices are going up and will be less resistant. Profits will fund your changes.

The worst strategy is to be frozen. Explore your options and prioritize your investments.

Lifetime Learning and Curiosity Required

“In a time of drastic change it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists.” 

- Eric Hoffer, Author The Ordeal of Change (1963) & The True Believer (1951)

No education has ever been complete out of school.  New tools, material and processes improve any service or product. Competition forces businesses to lower costs every year. ~25% of today’s jobs did not exist 10 years ago.

Words are added every year, over 640 to Merriam-Webster dictionary. New meanings are given to old words. Qubit, Geosmin, or Bioabsorbable anyone?

There are more books written every day. New research daily. Ideas are promoted or disproved. Politics and the times change the way we look at things.

Technology is rapidly changing our work. Smart phones, 3D printers, advances in programming, modeling software, virtual training and business practices advance every year.

Be curious. Tomorrow will be different than today. People grow and change. Everyday I try to learn something new or stretch knowledge some way. What are you going to learn today?

Counting Little Wins

Diets don’t work. It’s hard to be disciplined to starve yourself for little reward day after day, week after week. Weight loss takes a lot of time.

Beating yourself up does not motivate you. It just depresses you and kills motivation.

Count little wins will motivate you. Skipped a cookie or snack, win. Walked at lunch, win. Parked further away, win. One less adult beverage, win. Lost a pound, win. Not binging full package of snacks, win. 

3 Rules:

1. You decide what a win is. No one else gets a say.

2. Count only wins. No counting losses.

3. No one is perfect. 

Messed up? Tomorrow is another day. I may mess it up again, am still looking at my wins. Reinforcement of wins keeps you going. Over time you will have results.

“If you don’t take care of yourself, no one else is going to do it for you.” - Jewish philosophy on uniqueness of our potential.

Space is Cool

On the 50^th anniversary of the moon landing, why space is still cool:

  Weightlessness.

  International Space Station uses international technologies – Belgium, Denmark, France, Germany, Italy, Japan, The Netherlands, Norway, Russia, Spain, Sweden, Switzerland, United Kingdom and United States.

  Space walks.

  Every space program experienced failures.

  “Space is hard.” – Scott Kelly after a SpaceX rocket failure.

  Traveling in a Vacuum.

  Lives were lost. Hard lessons learned.

  Moon dust is dangerous, blocks vision, sticks to & degrades materials, grinds up machinery and people may be allergic.

Lunar Rovers.

 China, India, Israel, Luxembourg, New Zealand, and Singapore are exploring space & the moon.

  Slide rules sent astronauts to the moon.

  On budget and on schedule.

  “No one born after 1935 has stepped on the moon.” – Burt Rutan, Aerospace & Spaceship designer

  It will always involve risks.

There is so much we don’t know. Men and Women need to return.

Why You Need a Vacation

Breaks: Weekend trips. Prefer week off (plus a recovery day). You need a break away from your patterns .

Habits: Vacations make us change. Hiking with bear pepper spray. National parks have no or limited cell service and internet. Use those funny things called maps. 

People: Met great people from all over. NY, OH, CA, AZ, MO, TX, AK, MT, ID, OR, WA and Asia. 

Memories: parks have mountains, glaciers, lakes, rivers, alpine meadows, and wildlife. Saw elk, moose, mountain goats, bighorn sheep, eagles, hawks, range cattle, bison/buffalo, horses, prairie dogs, ground squirrels, fox, black bear, and grizzly bear cub. 

Perspective: Climbing to 7,200 feet, rerouting roads & hikes, improvising cooking meals, seeing mountains, changing weather, and stepped on by a horse; how hard can this production problem be?

Take a break from your daily worries and routines. Enjoy your vacation :)

            Glacier National Park, Montana. United States Alps.

Mid Year Investing Change

Not an investment guru nor paid financial advisor. Just interested amateur who is convinced No One Really Knows what is going to happen. The stock market often surprises me with its ongoing changes. Stock market is driven more by investor psychology/feelings than statistics or data. Made more sense once figured that out.

Building wealth is making good consistent decisions to save and invest steadily while avoiding debt. Very few lottery winners have their windfalls 10 years later, spending wildly and taking high investment risks. Like they felt guilty having wealth. 

The S&P 500 is up ~17% this year after a ~10% drop in the 4^thquarter of 2018. The ongoing economy expansion is over 10 years old, but has only grown ~2% a year. Hardly the sign of a stock bubble. Bubbles follow 100% growth over 2 years. Market volatility has been increasing over the last year. The Federal Reserve is concerned about the slowing economy, and no longer raising interest rates.

The average is recession show up every 3 years, so expect a 10% - 20% stock recession in next 1-3 years. However the stock market may be slowing, but could still grow another 10% this year. What is an investor to do?

Choose to reduce the percentage of stocks in my 401K by 20%. A 60%/40% or 80%/20% stock to bond ratio could be dangerous to your principle. Lower interest rates benefit bond funds and reduce 401K volatility.

Jared Dillian, Mauldin Economics, (who I subscribe to) has proposed a 35/55/3/3/4 Portfolio which performs well with 80% less risk. He describe it below:

• 35% in equities invested in stocks with growing dividends, across all sectors.
• 55% in fixed income split between Treasuries (including TIPS), corporates, mortgages, municipal bonds, and a handful of international bonds.
• 3% commodities, 3% gold, and 4% REITs.

The blended yield of this portfolio is probably around 3 to 3.5%. 

For us nearer to retirement or uncomfortable with current market conditions, this plan would let you sleep at night. Remember Have No Idea what will happen next. Nor compensated for writing this. Just sharing thoughts or a strategy that may benefit you.

Innovate New Ideas

Industry Best Practices versus “That’s the way we always did it” are always a challenge. But the reason you have a team involved is there is a problem. Why limit your results to copying?

First step is not coming up with possible fixes. Research and deeply understand the issues facing your coworkers. The symptoms are not the cause. Often the people doing the daily work have the best insights. What they see and hear often identifies where the process is failing. Be sure you have deep understanding.

People often jumps to the wrong conclusion. Told by senior manager, “Your department is delivering orders late. What is wrong with the shop?” Company delivered finished products in 5 days, knew the shop is well organized. Asked the line manager, “We are getting the orders late on days 4 and 5.” Led to investigating and fixing the order entry process. 

Second come up with alternative solutions. The more ideas you incubate the better. Don’t be critical. “What If …” questions are great here. There are no bad ideas at this point. Bend, break or connect different idea. Try the opposite “What is the worst thing we could do?” Don’t limit creativity. Good ideas come from everyone.

When you rank ideas or have the light bulb moment, time to execute and verify the solution. Often solutions have to intenerate or be redesigned to get the desired outcome. Follow up to get it right.

Safe Travel

The aerospace industry had a “bad year” in 2018. International accidents accounted for 564 fatalities. 2017 was the safest year in history, but 2018 was still among the safest. This is despite increases in passengers and miles flow. 2019 expected passengers are almost 4.6 billion, around 130 percent higher than in 2004. 

In the 1950s & 1960s US airlines has at least a half dozen crashes per year, most leading to fatalities. The number of fatalities per million miles flown has dropped drastically since the 1970s.

Why? Safety has been created by developing systems and through extensive testing. Aircrafts are designed with safety and redundancy in mind. Two engine airplanes could take off, fly and land with one engine. They are built and maintained by trained professionals executing detailed plans. Pilots are extensively trained and rehearse emergency procedures just in case. Regulators ensure procedures are sufficient and followed.

Everyone works together - airports, competitors, and regulators from around the world. When an incident happens, we study what happened and what the potential causes may have done that. We learn together, design solutions, mitigate risks, and ensure incidents will not be repeated. We grieve those we lost.

New materials, electronics, sensors, computers and controls are being developed daily. It is not simple, nor easy to do. But that is most valuable for everyone. Safety depends on everyone working together. How can you help?

Life has never been risk free. Happily will fly on any commercial or regional flight with my family.