Best advice you can give someone – Play Better

David Frost // Market Outlook


June 3  

This morning I was reminded of how simple life can be.

Just having dropped my daughter off at school I took a detour on the way home and stopped at my favorite neighborhood breakfast nook and deli.  I normally get a cup of java and one of those muffins where you just really want to eat the top.

This one is owned and operated by Danny and Linda, a husband and wife team that have been the proprietors for thirty (30) years.  They raised and supported a family, sent their children Cole and Vanessa through 4 years of college and so on…

It’s been a great business for their family.

Of course, Danny loves the stock market so we always have much to discuss.  Like clockwork he had CNBC on and the morning crew was interviewing Mayor De blasio from New York City.  Danny had a worried look on his face and asked “do you think they’re going to raise the minimum wage to $15 an hour?”  That was the discussion on the table with the Mayor.

I knew exactly what was worrying him.  It’s the same thing haunting small business owners across America.

Danny told me he has 8 employees.  They make an average of $14 per hour now, some more some less.  Michael who makes $9 per hour works next to Nick who’s been here 10 years and makes $17 per hour.  “If I have to pay Michael $15, then everyone has to get a raise.”  He’s right.

Danny leaned over the counter and whispered that his annual labor cost is over $300,000.  He said “this looks like it’ll cost me and extra $75,000 per year if I’m lucky.”  Then he looked at me with pain in his face and said “David, I can’t do it.”

He knows that it’s either him or them.  Danny knows that his family can’t afford to absorb that kind of money, they won’t be able to afford everything they can today.  The pain in his face was the anticipation he would have to make the kind of decision that changes lives.

Like many small business owner throughout main street USA, Danny may be face with the following choices.

Do we sell our house, tighten our belts and try and keep everything at the store the way it is?

Do we have to lay off some of the staff that we treat as family, who have families of their own?  If so, what will happen to service at the deli??

Do we sell the business before this takes place, but still Jeopardize the livelihoods of the people who work for us now?

This is not the type of behavior a government policy should promote.

The politicians always miss the point.  They try and conform to the party line which is after nothing other than votes.  They want the votes from the very same people they pretend to help.  In fact they’re promoting the wrong behavior and don’t even realize it.

The nice gentlemen that I play golf with have a favorite saying.  It’s used when one of us is playing poorly.  Poor play equals losing money for the day.  Nobody likes to lose money, therefore the result of poor play and a lighter wallet spells complaining on the golf course.  The response from the group is “PLAY BETTER.”  And that’s exactly how I feel about this minimum wage deal.

We need to play better.  We need to do better for the people that need help moving forward.  We need to incentivize people to do better for themselves rather than rely on a government policy to do it for them.

Unfortunately sometimes when you get more, you tend to give less.

What is the grand plan for fixing the problem?  I only have ideas but no solution.  This one has unintended consequences written all over it.

For now, let’s turn our focus on the markets and get into the daily analysis video below.

About the Author

Trading and investing in markets is second nature to some, but a mystery to others. The goal is to provide a forum where everyday people aspiring to be part time or full time traders will learn how view markets differently and profit beyond their wildest dreams.

David Frost