Prepping: For the “Bull Market’s End”

This being a holiday weekend, and because a lot of people will have a bit of extra “personal time” tomorrow, it’s a dandy time to take a steely-eyed look into the future.

The bull market the stock market has been in will end one of these days.

The specific cause doesn’t matter.  What does matter is what you do to get ready for that occasion.

About Bull Markets

In our work on cyclical economics, there are lots of repeating events to look at.  About every 10-12 years, California goes through a “real estate cycle.”  The very Sun, goes through an 11-year cycle.  (Cycle 24 is ending right now and we are awaiting the uptick in sunspots that will signal Cycle 25 showing up.)  Economists look at this potpourri and call it the Juglar cycle.

The present bull run in the market can be traced back to the end of the market decline from the collapse of the Housing Bubble in 2008-2009.  In reality, though, there was still plenty of economic displacement being felt even into the 2011-2012 period.  The pain of a housing crash is long and deep.

The Federal Reserve’s Economic Data dispenser (FRED) does an amazing job of keeping track of things like the nation’s unemployment rate that – not surprisingly – peaks when the bull markets in stock and bonds hit headwinds:

Sure, not all cases of high unemployment can be blamed on cyclical economics.  But, where there are exceptions – like the 1973-1975 period circled in red – you’ll usually find a ready explanation for the aberration.  If you’re too young to remember, that was the Middle East Oil Embargo and the related price shocks and…oh yeah…economic displacement.

“What’s to Prep for?”

Fine question.

As individual citizens, we’re like “victims on the bus.”  We can’t get off the bus and most of us don’t have the ready cash to sneak off to some third world hideaway and life happily ever-after.

We’ll have to “cope in place.”

Setting Expectations

When a bull market ends, things happen in slow-motion.  You’ll have time for some modest prepping efforts.  But, you’ll need a plan and some longer-term strategies to move your life along.

A quick review of past “bull market endings” shows they usually have a basis in some dominant investment or economic activity.

The bull market we’re in now was recovery from a “Housing Bubble” collapse.  The one before that (2000) was the “Internet Bubble” collapse.  The 1990 recession was really an “Inflation Collapse” – driven mainly by Federal Reserve (and Bush (the elder) economic policies, though it wasn’t covered in the papers that way.  “Jobless Recovery” is how it was billed…and it swept Bill Clinton into the White House in 1992.

We could go on, of course.  In 1970, I was a young news director in Seattle when the billboard went up “Will the last person leaving Seattle turn off the lights?”

What each has in common is a rising tide of public awareness that something’s changing.  And, not for the better.

This is the WHAT to prep for.  And the WHEN is as you notice articles like “Longest-running bull market in XX-years.  These are sure-fire signs that you need to begin the prepping now.

“How Can Your Prep, Though?”

Another fine question:

Let’s go through my structured list and figure out what will serve you best.  Every case is different, of course, but these ideas should be useful:

Finances:  The main thing to be “structuring” right now is a reliable income-stream for you and the spouse.  Is there a way you can see to increase your value to your present employer?  Should you take some additional training?  Prepare  or offer to do a bit more overtime?  Bring in doughnuts for the office, now and then, and frankly (crude as it is!) practice your corporate suck-up skills to the nth-degree.

Step One assumes you have a job.  If you don’t, get one pronto and make it one that is at least somewhat recession-resistant, if possible.  Jobs in government, education, and healthcare will be more reliable than jobs in construction, for example.

Step Two is to find a “side-hustle.”  Surely, there has to be something you can do that could raise a little cash?  As a kid, I always knew that with little persistence, I could come up with a little extra money doing odd-jobs around the neighborhood..

No, we’re not kids, anymore (well, mostly…)  but you can still find the odd “gigs” job on Craigslist.  One of the worst jobs in sales in telemarketing.  But, if someone will pay you $15 an hour for a side-hustle, then maybe 10-hours a week – when you might otherwise be moping around the house or being a beer-sponge, could be better spent making another $150 a week.  Sounds like chump-change, until you look at the annual take: $7,800 a year.

Which is how many car payments?

Step Three:  Plan a side-hustle that will be hard to automate with a robot.  Apartment management sounds like a great deal – and for lots of people, it is.  But the money is just laying around real estate offices that are managing a few rentals.  Find a few such offices, set up a small (back of the truck) repair business, and you’ll be in great shape.

Step Four:  Utilize the magic of other people’s work.  Find (or buy) a small business that has good expansion possibilities and get others working for you.  An acquaintance of mine was a good carpenter-type who did a restaurant remodel or two.  Next thing you know, he was doing remodels in a three-state area with multiple crews doing updates to fast food joints.

See where a side-hustle can go?  Go big – never nose sight of the fact that you are the boss – or can be – if you put your mind to it.

Study Unemployment

My son left a good job to take the summer off to fnish some of his lifetime goals.  Frankly, I don’t think getting over the 700-mark in skydiving jumps is a worthy goal, but it’s his life so he gets to spend it his way.

Thing is – and it’s a big learning lesson – he walked away from a State job and now he has to find a new job.  And the hiring hasn’t gotten easier.

Hard Rule:  NEVER lease one job until you have an employment agreement inked and a start date and such before turning in your notice at an existing employer!

If you “fail to execute on this” you can get stuck like someone I know – out of a job AND out of unemployment because a “quit” is different than a “fired.”

The question to ask yourself is this:  “If I got fired tomorrow, where would the money come from???”

This gets us to the heart of real prepping.  Do you have a…

Job-Los Contingency Plan?

All of your Seven Major Systems of Life (from my book“The Millennial’s Missing Manual: What School Didn’t Teach and What Old People Didn’t Explain” Amazon, $3-bucks, don’t be so cheap!) need to be figured in advance.

Food:  As part of being even a “cowardly prepper” you should be at least a month-out in most of your foods and disposables (toilet paper? yeah!)  If you’re not, you’re not going to get prepped by doing nothing.  Like wearing that “V” (for “victim”) on your forehead?

Buy two for now, save one for later.  Figure the ratio that makes sense. Think of it as setting up your own personal food bank.  Best part is, you’re in charge of how much and when you can take things out of it…

Shelter: How many months of rent do you have set aside?  If you don’t have 3-4, you need to get cracking on that one.  There’s nothing worse than having to beg for a place to live.  Or, living on the street.

Have you cleverly timed your lease term so that if there’s a major decline in the market (and business confidence) you can move into a cheaper place (or better for the same dough) when  times get bad?

Work out things from your landlord’s perspective.  “You know, if I move out, you might have an empty place here for a couple of months.  Give me 5% off my rent for the next year and….”

Communications:  What is your cheapest possible data plan?  Did you think to get a phone with wi-fi so you don’t always burn airtime?  Not an online gamer on a phone, are you?  You’ll never be rich and successful pissing you life out a modem, right?  Unless you own EA or Steam, of course…

Transportation:  Again, how many car payments do you have left to make?  Got any outs?

When was the last time you “shopped” car insurance?

Environment:  Quit the gym.  Start a painting company.  Paint houses and apartments.  It’s a two-fer:  You can get exercise PLUS money.

Rethink your healthcare – what about the religious healthcare cooperatives?  Check ’em out.

Energy: What part in my book “How to Live on $10,000 a Year – or Less” where I talked about bikes, public transit, the joy of beaters, and ultra-high mileage cars did you miss?

And in Finance:  If you own anyone a dime, pay it off now.  Compounding interest is the weapon that kills people’s futures in economic downturns.

Fine out what the waiting period is – and how much dough you will clear – from unemployment.  Do you qualify?  Change the board pieces before the game begins!

What investments can you make in yourself – right now – that will paty dividends when times are bad?

How are your teeth?

OK,. OK, enough already!  You get the idea and I’m not trying to piss all over your supposed to be fun :”Labor Day” weekend.

But here’s the real schiznit:  The American Labor Movement is dead.  It sold out (or was hijacked) by a bun ch of mostly left-wing activists who talk the talk but don’t walk it.

In the 1950’s, one person working at a job could raise a family of five.  I know because I was number 4 in that kind of a family.

Today, one of the major drivers of the LBGTQ movement is two people – even without offspring – have a hard time making it.  And for young couples, increasing numbers of would-be grandparents (like me) see our branches of the gene-tree hitting the wall.

The hell of it is, we’ve screwed ourselves.

So please take a moment today to remember – and thank – people in the moderate American Labor Movement for their service to keeping this country great.  People like Harry Bridges and Dave Beck changed the country for the better,  Throw in Jimmy Hoffa, too – if you can find him.

It’s not too much to claim that if you have employer-paid anything – there was someone in the Labor Movement who were willing to strike and starve to press the demand for a living wage.

Please, taking a few minutes to contemplate three things today:

1. Am I ready for when the Bull Market turns down?

2. Have I taken at least some of the reasonable preparation steps to ensure my “continuity of life” in Hard Times?

3. How do we keep crooks and politicians (but I repeat myself) out of the Labor movement so we can make some progress back toward a living wage for working families?

Write when you get rich,

22 thoughts on “Prepping: For the “Bull Market’s End””

  1. Great article George. As a senior citizen, if things get bad, I have assumed I will stand out as an easy target when the hoardes rebel. Also, since I failed my living in the woods survival test, I will have to be prepared to stand my ground.

    To accomplish this I figured I needed to fortify the house.

    1. Mountain House freeze fried food.
    2. Cash, gold, silver hidden in the house.
    3. Guns & ammo.
    4. Propane stove.
    5. Water is still a problem.
    6. I always have a side hustle going.

    It will probably never happen in my lifetime, but it is a fun to prepare, & since if it did happen, my wife would say to me, “You better take care of this problem”, so I need to be somewhat prepared.

    • Fortifying a house includes keeping it safe from burglars. Is someone home 24/7 and armed? Most houses are not occupied that way, and most any American house can be broken into with nothing more than an axe, or even a screwdriver. Think about how long it takes to break in, how much noise it makes, and how much effort it takes. Raise the stakes for the bad guys. In the old days, people might be able to break into a church, but couldn’t break out again. They’d be confronted by the populace with no good answers. Alarms are good if you’re home, or if it wakes up the entire neighborhood. Otherwise, they’re just an expense. Cameras are good to prove you got robbed, but they won’t get your stuff back. If you have something worth protecting, then protect it! Insurance companies are there to collect premiums, not to pay out. Don’t ever count on them. The extra effort may seem to be wasted time, especially since you might never know you were bypassed for a burglary. Just remember that you could lose everything if you don’t secure your stuff, even for a trip to town to get groceries.

      • Yeah, what are you planning to do, set booby-traps? The police and legal authorities take a dim view of that! Sounds like ‘the bad guys’ are living in your head 24/7 . . . chill out once in a while or you’ll have a stroke!

      • I don’t recommend getting truly paranoid, but make sure that things you absolutely can’t afford to lose will take hours(at least) to find and remove. If you set the security bar(pun intended) high enough, you’ll create more problems for a burglar than he/she/it wants to handle. No point in making your place look like a jail, but setting out a couple of warning signs and cameras, and then installing other deterrents quietly will limit the damage. Get to know your local PD and sheriff. Help out if you can. Don’t do booby traps, but do legal things that will assure you can identify an interloper and keep your stuff relatively safe. Then keep your mouth shut.

        One big advantage of cameras is that you can have a simultaneous view of your entire surroundings from the comfort of wherever you are. Sometimes it’s fun just to watch a storm or a sunset while relaxing.

  2. the bull market ends when the coming cold weather change freezes its feed lot. that’s what i’m prepping for.

  3. George, there’s a massive difference between being super competent at anything and being able to organize a business with employees doing the same thing. The routine of control, HR functions, paperwork, management including evaluating employees, motivating them, getting out of the way, and making a profit consistently is not taught the way trades are. The people skills are either acquired at your expense or that of someone else. I figure that an employee moved to a management function probably takes two years to hit his stride, so it’s best to learn management as an employee, rather than on your own dime. That said, if you can organize a company to run with minimal oversight, you can turn your efforts to other things, like longer term planning and other ventures.

    If there’s a simple recipe for this one(the people skills), I’d love to hear about it.

    • Many here may not like or appreciate this paraphrase of a quote, but for me it has a sense that rings true.

      If you are not part of the solution, you are part of the problem! lol

  4. I sold both of my Bitcoins ($175 buy in) last winter and bought a home freeze dryer. Now when I find a great sale on fruits and vegetables I load up and run a few batches. I do the same with meat although I cook it first. My only other expenses are Mylar bags and oxygen absorbents. I figure the electrical cost as prepaid. My goal when selling the Bitcoins was purchasing a hot tub. Because I don’t have the expense of heating and pumping the water, I figure I am using much less electricity operating the freeze dryer. I picked up a few 55 gallon poly drums from the Coca-Cola plant which were used to transport syrup. I use two for long term water storage and the other as a rain barrel. I have a good water filter to remove any chemicals that may leech prom the plastic drums. I could have gone for solar panels but living in Kirkland, WA we don’t get a lot of sun. But we do get plenty of water.

    I am fortunate to have all like-minded neighbors in my cul-de-sac. We each have our own set of skills. Together we can form a sort of self sustaining village should the need arise. In case of a natural disaster, EMP or civil war we already have our wagons circled.(cul-de-sac)

    If or when the zombie apocalypse begins, I would not last more than a day or two alone. Even with an AR-15 and a stockpile of ammo. Besides, I really prefer working with my neighbors rather than shooting them.

  5. All good points NM Mike. I think you turned me into a paranoid. Too many variables that I can’t control. Just keep moving forward until you can’t anymore.

  6. Many of the major city rejuvenation projects are based on credit.

    Look at Detroit, anchored by a mortgage company and a car company. The downtown hustle and bustle surrounds casinos and sports stadiums.

    I’m seeing home refinance dilemmas. When people refinance they can still snatch some equity, but the rate is higher so the payment is going up.

    The wild card is Section 8. Right now the criminal element is spread out. If Section 8 goes away will the suburbs fall in favor of the city surveillance states? Or will the criminal element re-concentrate into the cities?

  7. “In the 1950’s, one person working at a job could raise a family of five. I know because I was number 4 in that kind of a family.”

    Isn’t that reason enough not to bury our politicians, but to ‘mussolini’ them high enough? ;-( People don’t care enough if they’re getting screwed, me seems.

  8. You can have months of crap and money set aside for every situation….but if you are 500 lbs over weight and not mentally prepared, you just a victim with a bunch of stuff.

    I have talked to people over the years, and i have been super prep’d at times. What ya got between the ears, is 5000% more inportant than 6 cases of TP.

    I remember back in the day, George had a link to 1000 army and field manuals on pdf. I actually read them all. Even then, they dont teach you how to make a set of points on a distributor cap out of beer can tabs. Lol and i have done that out in the mountains wheeling. Lol

    Precision thinking will seperate the herd from halves and the have nots. I have helped a ton of people in the last 2 decades. Countless homeless people have stayed on my couch, many who are successful buisness men and women now. I cant count how many people have told me that i changed their lives.

    Its more than networking. Its about being the difference. The other day my monster truck broke down. (Before i got rid of it) and i had 12 people offer me their cars so i could get to work. One just bought me a $500 subaru and her and her boyfriend drove it over and said here. This is yours now, it aint much but we bought it for you, so you have wheels. I told them oh i will pay you on payday. And she says, for what? I slept on yout couch for 3 months and you fed me, got me a job, and took me to the dentist and paid to get my license back. Changed my whole life. You ever need anything, you call me!

    I just made a simple post in facebook and all was provided.

    That is the best investment advice i can give. Invest in people, and invest in how you think.

    • Thank you Andy! This social thing is an undeveloped skill on my part. It requires a level of trust that I’m not sure I even have, and it’s worth working on. I’ve been blindsided to what you’ve been doing and could definitely learn more here. It could certainly help with other life situations too.

  9. George, my retirement date was yesterday. Took everything but insurance. Joined a Christian health insurance co-op.cost the wife and I 440 per month with 300 out of pocket per occurrence. Going to try it out for awhile and see how it goes. Wish me luck. In the the process of building dream house on 24 debt.

    • You are living the dream, brother. Just a word to the wise: With no clock but your own, take the time to be careful with all tools. And on projects ask constantly – “How will this be 5-years from now? 10?”

  10. George, nice piece on economics today, (although am thinking maybe you haven’t noticed the Right’s ongoing, relentless war on unions). Best, Mike.

  11. The fall of our empire won’t happen according to some Hollyweird script. Instead, plan for a slow grind punctuated by moments of terror, as everything becomes more fragile and expensive. Just like yacht racing.
    Skills, savings, family, community.

    Mosby’s “Forging the Hero” illuminates this trajectory nicely. His discussion of Glubb and Orlov alone will keep your attention while alleviating some common prepper anxieties.

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