Inflation Cycle vs. Business

[Ing]

Mods, I didn t know, where to place that, if necessary, feel free to moove or delete.


Only a thought experiment; as I read about the inflation cycle today.

1-state prints money
2-businesses invest
3-demand rises
4-businesses invest, raise profit
5-employees demand and get more money
6-planning security for businesses sinks
7-profit isn t invested, but pulled out
.
.
.
Now, should an entrepreneur change his businesses over the time of that cycle, or just go on and have his prifit changed during the time?
He could Begin a business in 1 and sell it in 6 , wait for next 1 to repeat...

My thoughts began at the rising money print activity of the US this year. According to that, imo now would be a really good moment to start/grow a business.

What s your thoughts on that?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Kevin88660]

Mods, I didn t know, where to place that, if necessary, feel free to moove or delete.


Only a thought experiment; as I read about the inflation cycle today.

1-state prints money
2-businesses invest
3-demand rises
4-businesses invest, raise profit
5-employees demand and get more money
6-planning security for businesses sinks
7-profit isn t invested, but pulled out
.
.
.
Now, should an entrepreneur change his businesses over the time of that cycle, or just go on and have his prifit changed during the time?
He could Begin a business in 1 and sell it in 6 , wait for next 1 to repeat...

My thoughts began at the rising money print activity of the US this year. According to that, imo now would be a really good moment to start/grow a business.

What s your thoughts on that?

From a fastlane perspective its good in some strange ways.

I think your cost of business is higher but anyway this will be passed to the consumers who buy your business and products.

The good thing is that higher inflation comes with Fed’s action in high interest rate to combat inflation. This means that for yield investing you are getting the best deal over.

Someone who exists his or her business now in one million dollar gets a guaranteed five percent return for simply buying gov bonds. The escape number becomes smaller.

 

[Kak]

Just be the CEO. Always seek a comparative advantage. Conduct mutually beneficial business. Win as often as possible, irrespective of points in a cycle that are impossible to time propery.

There are also other cycles to consider.

If you are good at timing it, you will have something productive to do with your savings.

 

[Johnny boy]

Macro timing is a matter of percentages
10% here, 10% there

Making good decisions in entrepreneurship is a matter of exponents.

Orders of magnitude.

100x
10000x

You tell me what makes more sense, turning 10,000 into 12,000….

Or turning 10,000 into 10,000,000?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[amp0193]

7ish-10ish-year Macro economic cycles do affect outcomes (although you can be successful regardless of where the world is in the cycle).

Best time to start a business might be during a downturn (or just after).

Debt will be harder to get. Investors will be harder to get. Customers with disposable income will be harder and more expensive to find. But if you can exist in this environment, you are poised and ready to take advantage of the next bull run (and will have years of experience on whatever upstarts see the hot market and try to jump in later).

If you exit while the market is hot, you will get a higher multiple in the outcome.

I don't think being more aware of the cycle would have affected my decision to start my current business, but it may have given me a more realistic expectation on timeline to exit.