Jun

25

My best friend since kindergarten has a filter business. He has a clientele of businesses that he goes to and changes the filters on their heating and air conditioning units. It's a steady business and affords him time to go hunting and fishing. But it's also a luxury business.

Since people don't need their filters cleaned, if they are experiencing any financial difficulties, they usually cut him back or even stop his service altogether.

He and I were talking on the phone today and I asked him how his business is going. He said he's having to work harder to bring in new clients to make up for the one's that either cut back or cut his service off completely. He informed me that times were tough right now in his normally steady as a rock business.

‘Why,’ I asked?

He said that there seems to be a direct connection to his prosperity and the price of gas/oil. His filters are petroleum-based and the prices of his filters are up 25%. Plus he drives around all day between his businesses so the price of gas affects his bottom line. But the biggest thing that affects his business is gas over $3/gallon. He said there seems to be a direct psychological effect on people when they see gas go over that number. Sure, the increased prices affect his bottom line, but when gas gets over $3/gallon, customers start cutting back or canceling his service.

He says the business attitude and environment are completely different when gas is under $3/gallon than when it's over $3/gallon. And even though my buddy has a blue collar business and gets his hands dirty for a living, don't think that he's some dummy. He's a sharp guy with a good business sense and a better people sense. But he's not very bullish on the economy right now, and since the core of his business is serving other mom-and-pop businesses, he's got a good feel for what is going on in.

So, to lessen the chances of me being a labeled a bear, I would submit that the focus of this would be (as always is the case with me), ‘how do we profit best in this environment?’ I'm not asking that rhetorically. One thing I'm considering is doing something with my buddy. He's getting burned out on his current business and is considering selling it. He's not sure what he wants to do, but he's got a nose for finding things.

I wonder what opportunities are going to be popping up in the coming economy? I'm going to keep my eyes open for them! Especially opportunities that create passive income streams. 

Ryan Carlson writes: 

My feeling is that the US is split between those who have a lot of money or owe a lot of money. To profit from the latter, I got some ideas from an article on publicly traded debt collectors, Two Stocks Poised To Profit From A Debt Collection Boom.

I don't own the stocks mentioned yet, but it's an idea I'll investigate further. The risk to these debt collectors is that the politicians change the rules of the game. 


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