Where We Are Now: March 20, 2020

Work From Home — Day 5

$1 Trillion Coming Our Way

5:45AM PST

Team – 

Here comes the initial wave of Federal stimulus. As of 5 AM today, the DOW Futures were up 552. As I release this writing, we have dialed back to DOW Futures up 250. Time period, less than 45 minutes.

Seems the pending 10 AM ET announcement will include $1 trillion in stimulus to the private sector alone.  My instincts are this could be the tip of the iceberg for the private sector and it still does not include the public sector and/or Federal Reserve stimulus yet to follow. Order of magnitude, this is unprecedented.

Check out this e-mail I received late last night from Patrick Barber, President:

I have never been more excited about our business in relation to dominating SIR, Zillow, Redfin, I-buyers and the other major competitors. This past week has shown me Compass’ true value to the professionals as we educate, coach, negotiate and advise our professionals.  We can take this difficult circumstance and demonstrate our exponential market differentiation. Sleep Fast! The opportunity is ours!

Patrick is spot-on correct. Like in 1980 Olympic Hockey and 1996 Olympic Soccer, USA teamwork has demonstrated greatness and world championships time and time again. The power of the team is exponential to the talent of an individual. 

Right now, I see our team in training for a pending championship.

Make the best of today – remember to get out and walk, breathe fresh air, knock out some yoga moves and take care of your mental and physical well-being!

Thanks!
Mark

Mark A McLaughlin

Work From Home — Day 5 — Closing Bell

What Will I BBQ this Weekend?

5:45PM PST

Team – 

Wow! What a week. I have some comforting news for you about grocery shopping. Yes, something as routine and simple as grocery shopping. Full service here!

This morning I spent 25 minutes on the phone with the CFO of a regional grocery store chain in SF Bay Area. I know this gentleman as he was the CEO of a regional bank I was working with in the 2008-2011 time frame. 

I’ll be brief:

  • My queries were about his supply chains and their viability going forward. I now have an open line to him for future questions and I have a great degree of confidence in the grocery business.
  • Grocery stores are an “essential service.” Our trips to grocery stores are as well.
  • The “panic buying” was so unnecessary – but understood!
  • Most grocery stores have four to six major wholesalers and an assortment of “direct drops” from specialty, likely local, suppliers.
  • When “panic buying” happens, it’s the distribution system, the days after panic buying, that struggle to keep up. For instance: if a wholesaler’s truck is packed full and regularly supplies 6 grocery stores in a day; then they all increase orders by 50%, the trucks can’t meet demand.
  • Right now, this particular grocery chain is ordering 120% of normal and receiving 80% of the orders daily.
  • One hard hit item is paper products, BRING YOUR OWN BAGS.
  • Consumer activity is falling into two categories:
    1. People buying 2 – 3 times as much per trip to store and making fewer trips – so, on balance, the same amount of groceries
    2. Additional “panic buying” will have very short-term inventory impacts.

Looking out 45 days, this CFO is confident in his supply chain.

This weekend, I have interviews set up with a gentleman that owns several restaurants, then a brewery, and a tequila supplier. 

I do not drink wine, but if I start, my best pal has more than his fair share down the street!  

Get some rest!

Thanks!
Mark

Mark A McLaughlin

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