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The Reverse Industrial Revolution

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Companies must reinvent themselves if they hope to see better days.

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"It is with our passions as it is with fire and water; they are good servants, but bad masters." --Roger L'Estrange, Aesop's Fables, 1692


Today's financial landscape is akin to a forest fire, scary and dangerous yet necessary to establish fertile ground for an eventual rebirthing.

As we witness historic wealth destruction, it's easy to get caught up in the gloom and doom. Acrimonious flames are rapidly spreading as social mood shifts, tempers flare and patience runs thin.

The point of recognition is here and it can be downright depressing.

There are three lenses with which to view this once-in-a-lifetime event-optimism, pessimism and realism-and each has a role as we wade through this process of price discovery.

Optimism is necessary to identify winners in the new world and find the future franchises of tomorrow.

Pessimism is warranted when viewing organizations that lack financial staying power or are encumbered with too much debt.

Realism is required to understand that time and price are the only arbiters of our financial fate and there will be inevitable casualties of war.

Welcome to the reverse Industrial Revolution, where most companies must reinvent themselves if they hope to find their way to better days.

What Goes Around Comes Around

Taking the other side of conventional wisdom is never easy. When Minyanville first discussed the "prolonged period of socioeconomic malaise entirely more depressing than a recession" in August 2006, the pushback was palpable.

Now that it's arrived, offering any semblance of positive perspective is widely considered Pollyanna. While the other side of the business cycle will take time-measured in years, not months-the simple truth is that in order to get through this, we needed to go through this.

The fact that we're going through it now is on the margin constructive.
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