We are amidst a wealth transfer that will have vibrations for decades.
I thought when we started our cannabis fund, that would be the greatest wealth transfer I’d see in my lifetime; I believe there is now another. A rather more unfortunate one.
The Big Get Bigger, The Small Die
As told to me by the gentlemen who created the most recent SBA loan program, here’s what happens usually in small business land:There are 30mm small and mid sized businesses in the US600,000 close down each year 1mm new ones pop up each year as well Before Covid-19, we had 10,000 baby boomers retiring a day… oh and by the way 19% of them own a small business that will either get wound down or bought.In addition, this year we have a confluence of events that only accelerated this phenomenon. We have record baby boomers retiring AND a global pandemic AND a government enforced shutdown AND social unrest. 2020 is a real Karen.So it’s no surprise we are seeing record numbers of small business closures as evidenced by you driving down just about any strip mall or main street. I was just in Anacortes outside of Seattle and saw it myself:
We’ve talked about this before, and the opportunity that exists perhaps for the first time in our lifetimes to buy businesses with zero or little money down (at scale) because people need ways out. That’s why we started Unconventional Acquisitions, to teach people how to buy small businesses. It’s called Micro PE and we’ll break down an example below.
But the real thing that just gets me all hot and bothered is this:
The biggest companies out there are getting bigger…
If you aren’t tracking what is happening with tech company takeover, I am hardly the first to call this one out. Bloomberg hitting on it, Reuters piles in:
Scott Galloway below highlights Facebook, Amazon, Netflix and Google and their particular breed of massive growth.
No wonder Bezos looks like he has muscles now, he bought ‘em. In fact, more people have Amazon Prime than go to church or own a pet in the US. We are quickly becoming a for the people by the FANG.
Meanwhile, the little guys are tired and beat up. But this isn’t supposed to be a depressing news article highlighting injustice.Here, we do things about opportunities—both dark and light.So, what to do about Main Street getting clobbered?First of all, let me tell you where my money isn’t while at all time highs—the stock market. There is a complete deviation of economic reality to stock market speculation right now.
My money is in non-correlated asset classes, cannabis, essential services, camping sites (that’s a fun story) and cash flowing assets.
Codie Sanchez & Ryan Snow
Co-founders Unconventional Acquisitions