Christmas Madness

As the Christmas season comes to a head, we look back at the things that brought us to such a successful Christmas season. Retail sales look to be heading to their best year since 1999 according to CNBC. And I think we all can reminisce about how terrible for retail sales 2009 was. This brings us to a good point to remember in the midst of a recession.



While the years of a recession may seem harder than a block of steel wrapped inside concrete with the remains of last year's fruit cake all over the side of it, it is an interesting point to remember that the years following a recession tend to be some of the best years up to that point. Despite those who say that anything following a recession is better than what the recession was, the fact still remains that post-recession years average higher returns than any other bull market. Why? My answer is pent up demand. During a recession one of the main effects of the recession is reduced spending by individuals and businesses. It's not as if the demand goes away. Unfortunately, the demand that people have for goods and services goes unfulfilled until people can again increase their spending. As a result of this pent up demand, spending after recessions often reaches record levels.



Unfulfilled demands abound in any society and that is what entrepreneurs call opportunity. America as the land of opportunity, I would argue, has some of the most underutilized resources of any country in the industrialized world. This is not a result of less productivity, as any economist can attest, we are some of the most productive societies on the planet. The simple reason is, not enough people. Our population is still considerably small relative to our productive capacity as a country. We have entire swaths of productive land in our country that goes unused not because it is useless for anything, but primarily because there are not enough people to work that land. While there is a significant conservation movement in the US, our resources more than outpace our productive capacity.

So, in conclusion, those of you out there in the Grand Valley and around the country, always be looking for new opportunities because that next idea may be your ticket out of the rat race and pent up demand is something that will eventually be realized. Grab your piece.