http://alephblog.com/2007/08/18/a-moment-of-minsky/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Sun, 12 Feb 2012 18:05:33 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://alephblog.com/2007/08/18/a-moment-of-minsky/comment-page-1/#comment-3141 PaulinKansasCity Sat, 18 Aug 2007 18:02:41 +0000 http://alephblog.com/2007/08/18/a-moment-of-minsky/#comment-3141 Great post David! I would second that there are too many smart people in finance and not in the "real" world creating a service or goods based business. Altucher on Real Money has written in a similar vein discussing his experiences during the internet start-up era. I am part owner (among other things) of a vehicle delivery service (semi-trucks and buses) and your description of the business cycle is very applicable. Although the barrier of entry is higher now than 10 years ago(insurance during delivery) we still have a steady entry of low margin competitors (cents per mile over what you pay your contract driver) that never seem to go away! Our strategy to survive this cycle is refuse low margin business; keep costs under control, and constantly look for better margin deliveries. It doesn't hurt to work on a few things to portray as "value added" and avoid the arguement over price. Inevitably the larger players undercharging for their business to capture volume will get tired of losing money and either raise prices or get out of the business. The smaller ones almost always fail or never accumulate the capital to handle larger volumes when margins expand. Great post David! I would second that there are too many smart people in finance and not in the “real” world creating a service or goods based business. Altucher on Real Money has written in a similar vein discussing his experiences during the internet start-up era. I am part owner (among other things) of a vehicle delivery service (semi-trucks and buses) and your description of the business cycle is very applicable. Although the barrier of entry is higher now than 10 years ago(insurance during delivery) we still have a steady entry of low margin competitors (cents per mile over what you pay your contract driver) that never seem to go away! Our strategy to survive this cycle is refuse low margin business; keep costs under control, and constantly look for better margin deliveries. It doesn’t hurt to work on a few things to portray as “value added” and avoid the arguement over price. Inevitably the larger players undercharging for their business to capture volume will get tired of losing money and either raise prices or get out of the business. The smaller ones almost always fail or never accumulate the capital to handle larger volumes when margins expand.

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