Planet X

The following post is by my father, Richard Westheimer, who has the joy of working both in the early stage tech world, as an investor and occasional Board member, and in the stock market, as an investment advisor. He sent me this story earlier this morning, and I have edited out the name of the company and replaced it with "SomeCo." ~Nate Westheimer A funny thing happened on the way to the SomeCo board meeting.  I traveled from a world of increasing doom and gloom -- where jobs are lost at a furious clip, where banks are dysfunctional, where hyper-inflation looms behind each threat of deflation, where demagogues rule that airwaves, and a Max Headroom world beckons.  And I entered a world of possibility, action orientation, strategy, and tactical planning.

The meeting began with the expected report of expense reduction:  20% slashed from the expense line -- 70% of that was body count -- mostly from the SG&A side of the ledger.  The CEO reported increased efficiencies, elimination of dead wood, reassignment of tasks to more appropriate players, and little or no encroachment on quality or revenue potential.  Sales are actually up a bit year over year as other companies see using SomeCo's services as a cost cutting avenue.  John Doe CEO has hired recently -- a fellow with expertise in product development.  His addition has brought increased discipline and focus.   The deals for possible strategic partnership with several Chinese concerns are heating up -- not cooling.  Board of Director members who were advocating selling at a deep discount 6 months ago are talking strategy for growth.

I felt like I was on Planet X.  There was almost no discussion of macro mega-risk.  Everyone was either heads-down, grind-it-out, tactical/procedural, build market-share, pricing model refinement, QA, marketing strategy, OR big-picture, level-two break-out growth, strategizing.  Economic shit-storm?  What economic shit-storm?  (This IS an exaggeration, but barely. Folks at the table are suffering.  Businesses they command are facing serious serious strain.  Long term investments are suffering.  But folks were down-to-business.)

I am not faulting our work or actions.  I was really energized by the meeting.  We accomplished a great deal and I left with a sense that business can go on and rebuild -- and specifically that SomeCo can.

Sooooooooooooo.... what is going on here. Was this a microcosm of what is happening all over: Businesses tightening up their processes, focusing on core competencies, cutting out non-productive dead-wood, levering existing resources, repositioning for lift off throughout the recovery? OR was a sitting amidst a bunch of "hear no evil, see no evil, speak no evil" Armageddon deniers?

The good news: This is as good a place as any for active investment. The bad news: Well, there may be no good place.