The State of our Economy

On Friday I wasn't able to be at my desk as I am part of the Business Students Association at my college and we were putting on a Business Expo. Upon attending the expo, I have the opportunity of speaking with a local business owner who owns 5 Golden Spoons throughout the area I live in. If you don't know what Golden Spoon is it is a frozen yogurt chain which advertises as offering a healthy alternative to ice-cream. Rich is a very smart individual with a degree from UCSB. He has started his own business, built it up to 250 people and sold it, and has worked upper level for Microsoft.

The reason I am bringing this up is he said some very interesting things to me that changed my perception of the current Economy. On Bloomberg and CNBC we are told that everything is just peachy. Better then expected earnings, high growth forecasts, and improving housing numbers are all telling us that this recession is over. I wanted to get a different perspective so I asked Rich what his perspective was about the Economy, being in a business that deals directly with the people. He explained how this is the worst economy since the stock market crash of 1929. He told me of all his friends in the industry who have lost their stores, their homes, and whose lives are now in shambles. He told me how even he, with his solid, profit generating business that has been around for years, can not get a business loan.

And this got me thinking... California Pizza Kitchen is said to be going out of business, Block Buster has closed how many stores? I mean the Business Students Association couldn't even get a $200 loan from our School to set up the expo. This is not something that is going to go away over night, this is a serious problem. For now I am not bullish on the economy, I am bullish on the news on the economy. What I mean by that is I no longer believe all of these numbers that come out, all of the positive outlook. Until I hear someone in the real world working behind a counter saying "Sales are great!" my stance will not change. I will trade this market, but I will be watching very closely for another top and subsequent drop-off. Be prepared readers, there is a high probability it will come.

In other news IMAX hit a new 52 week high on Wednesday of 20.32 and were currently crawling back to that level. The fact that IMAX closed above $20 on Friday is very bullish in my mind. I am currently up around 90% on this trade :) hope you're enjoying profits as well. Will look at some point over this weekend to find some picks for the watch list. I am currently writing a research paper on Google for school which is the reason why my posts have been so few over this past week. After Monday my work load should lessen quite a bit and I will be able to focus more of my attention on this blog. Thank you for your loyalty!