Possible Changes During the Year 2018
Copyright © January 1, 2018 by Robert Wayne Atkins, P.E.
All Rights Reserved.
Introduction
The year 2018 could be different from previous years in several areas. Each of those areas will be examined one-at-a-time below.
Online Shopping
During December of 2017 delivery companies were overwhelmed with package deliveries. In order to keep up they worked their employees overtime every day, and some companies even made deliveries on Sundays. Even with these changes some delivery companies fell behind in their pickup and delivery schedules. The obvious reason for this significant increase in business was due to the significant increase in online purchases by consumers.
A lot more people purchased items online than they ever have in the past. Some people who have never bought anything online decided to try online shopping in December and most of them enjoyed the experience.
Some of the reasons people preferred to do their shopping online during December were:
- Fantastic Selection.
- Lower Prices (even with shipping added).
- Home Delivery.
- No Traffic Jams.
- No Searching for a Parking Place.
- No Risk of a Car Accident or a Traffic Violation.
- No Risk of Encountering Purse Snatchers or Muggers.
- Less Time Invested (Lost) Searching for Something.
- More Time to Do Other Enjoyable Things.
Online shopping has some significant advantages for some retailers for the following reasons:
- Fewer "Brick and Mortar" Stores Required.
- Less Total Inventory Required per Item.
- More Different Items can be Offered for Sale.
- Less Total Money Invested in Inventory.
- Easier to Manage Inventory in Fewer Locations.
- Fewer Backorders Because Inventory is Consolidated.
- More Potential Total Customers.
- Potential to Sell Worldwide.
- Fewer Employees Required.
- Lower Cost of Operations Passed on to Customers as Lower Prices.
- Higher Profits from More Sales and Lower Costs.
Over two dozen big companies have already announced that they plan to close a lot of their low profit or no profit stores worldwide during the year 2018 in order to avoid losing money so they can stay in business.
Some grocery stores are now allowing their customers the option to download an "app" and place their food orders online. When the order is received it is confirmed to the customer, an employee is assigned to the customer, the employee goes through the store picking the items on the grocery list as directed by the computer (shortest distance traveled and least amount of time required), and the employee communicates with the customer immediately by "app" if an item is out-of-stock but a different item is available so the customer can approve or not approve of the substitution. When the order is completed the employee delivers the order to the customer's location and the customer "tips" the employee for their effort (similar to a Pizza Delivery person). This has significant advantages for the customer and the grocery store and it may become the new business model of the year 2018.
During the year 2018 companies are either going to start selling online, or they are going to gradually lose many of their customers to their competitors. This includes small family owned businesses, medium sized companies, and large companies.
Movies
During 2017 fewer people paid money to see a new movie at a local theater. This resulted in less revenue being generated for the major movie producers. And this will have a direct impact on the types of movies they finance in the year 2018 and the amount of money they invest in making each movie. This will also have a negative impact on the revenue of local movie theaters and also on their concession revenues.
During 2017 more people began watching movies on online streaming service providers. This has resulted in increased revenues for these companies and this will help them to finance more of their own movies and series in 2018. And this will result in an increase in the number of their customers and in the amount of time those customers spend in front of their TV sets.
The above trend is going to continue in the same direction throughout the year 2018 unless something totally unexpected happens.
National Football League
The NFL made the decision to ignore their fans during the 2017 football season. Instead they made the decision to take a stand ("kneel") with a few of their players (employees). They could afford to do this because they already had contracts with the TV networks, and the networks had already sold NFL Season Passes to many of their network customers, and the NFL teams had already sold a lot of season passes to large companies who planned to use those tickets as a way to encourage the future loyalty of some of their best customers. However, during 2017 many of their customers declined the offer of a "free seat" at an NFL game because they were offended by the players kneeling during the National Anthem.
Sometime in the year 2018 after the 2018 Super Bowl game is over and before the start of the 2018 football season, the owners of the NFL teams will have to make a simple decision:
- Continue to let their players kneel during the National Anthem and gradually go bankrupt.
- Change the status quo in order to salvage the sport of professional football before it becomes less popular than a game of checkers.
Footnote:
The Department of Justice data from 1980 to 2008 reveals that blacks committed 52% of all homicides but blacks were only 6.6% of the population.
The Department of Justice data from 1980 to 2008 reveals that 93% of all black murders were committed by other blacks.
The FBI data shows that 40% of all "cop killings" were committed by blacks.
Investments
I don't offer investment advice.
However, I do occasionally make comments about investments in general.
No investment always increases in value. However, some investments do eventually become worthless.
My father, Jason Lester Atkins, occasionally gave me some simple investment advice that he had heard from someone else: "Bulls make money, and Bears make money, but Pigs get slaughtered."
Making financially sound, logical, prudent, diversified investments for the long-term is usually a good decision. Selling short in the short-term can sometimes make money. However, making a speculative investment in the hope of getting rich quick is almost always a loser.
At my age I am still amazed at how easy it is to attract a lot of people to an investment by manipulating its price upwards over a short period of time. This attracts lots of attention and a lot of people decide to get on board so they can earn a quick profit. And then the price drops rapidly over a very short period of time. At first people don't believe this is happening and they hold onto their investment because if they sold they would lose money and lose face. By the time the investment reaches it true value most people will have lost almost everything they had invested. Many of these people will continue to hold onto their investment because they hope it will recover one day in the future -- but it never does.
In the 1960s and 1970s investments were evaluated based on two simple concepts:
- Net Worth per Share: Net Worth per Share = (Total assets - Total liabilities) / (Total number of outstanding shares of stock).
- Annual Rate of Return on Money: Rate of Return = (Total of all dividends paid per year) / (Total current market value of all outstanding shares of stock).
Unfortunately a company's net worth may no longer be a good measure because the company may have assets on its balance sheet that do not reflect the true market value of those assets.
The above two simple concepts are not of much value today because investments are currently being made for reasons I do not understand.
Conclusion
The year 2018 may be just another ordinary year in history.
Or 2018 could become a benchmark year that people will talk about for a very long time.
Only time will tell if the year 2018 will be mediocre or unusual.
Respectfully,
Grandpappy.
Grandpappy's e-mail address is: RobertWayneAtkins@hotmail.com