Dizzy and Confused?
Hunker Down

Richard Russell snippet
Dow Theory Letters
Sep 2, 2010

September 1, 2010 -- Many years ago I wrote a piece that I called "The Perfect Business." That piece has been available on my site ever since.

I've had more requests for that piece than anything I've ever written. It seems to me that the criteria for the "perfect business" is now more important than ever.

And why are those "perfect" criteria so important? I just read a piece in Dennis Gartman's always informative report. The piece was written by Porter Stansberry on August 21.

Stansberry starts with the thesis that you're in the process of starting a new business or expanding your already established business. But wait, you've inherited a greedy partner. Here's your partner talking.

"The deal is this -- I'll be your partner in any business you start, as long as that business is legal.

"But I can't give you any capital -- you'll have to come up with that on your own. I don't give you any labor -- that's up to you. What I will do, however, is demand that you follow all sorts of rules about what products and services you can offer, how much (and how often) you pay your employees, and where and when you're allowed to operate your business. That's my role in this affair -- to tell you what to do.

"Now in return for my rules, I'm going to take roughly half of whatever you make in the business each year.

"You're also going to have to pay me about 12% of whatever you decide to pay your employees because you've got to cover my expenses for promulgating all of the rules about who you can employ, when, where, and how.

"Now, after you've put your hard-earned savings at risk to start this business, and after you've worked hard at it for a few decades (paying me my 50% or a bit more), along the way each year, you might decide you'd like to cash out -- to finally live the good life you've been promised. Wait I want part of that too."

Russell comment -- Well you get the idea. And oh yes, you might buy a lot of life insurance. Because after you die, I'll take half of whatever your estate is worth. One final thought, if you ever try to stiff me or hide anything from me, I'll break down your door in the middle of the night, throw you in handcuffs in front of your wife and kids and threaten you with my crowd of agents, all carrying automatic weapons. Then I'll throw you in the slammer, and you'll stay there until we work things out to my satisfaction.

Wait, who's the guy who's doing all the talking and offering you such a great deal? What, you haven't guessed? It's the US government, your partner in success. What's this? Now you're rethinking your idea about starting a new business? And your neighbor is rethinking his fantasy of expanding his business? Don't worry,guys, go ahead, you've got a big, powerful partner who is "always there and ready to help." What more could anyone ask for?

With this kind of partner, would you want to start a new business? And we wonder why nobody is hiring.

It's the little guy, the moms and pops, who do most of the employing in this nation. And mom and pop are tearing their hair out these days, wondering how they're going to survive in the Obama world of "tax hell out of the rich, and share the wealth -- just spread it around." The rich man and the little guy are both dizzy and confused. Maybe best to hunker down and see what Congress comes up with.

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Richard Russell
website: Dow Theory Letters
email: Dow Theory Letters
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