American Grit

On May 14th, 1607, the first English colony was founded in Jamestown, Virginia, marking the first establishment in the new world. Jungles, mosquitoes, and wild beasts greeted the settlers that were lucky enough to survive the voyage. But the settlers' were tougher than their lack of modern amenities, knowledge of the land, and surrounding conditions. Grit won the day.

On July 4th, 1776, the original thirteen colonies signed the declaration of independance, marking a new beginning for the American colonies and a formal separation from England. After numerous examples of blatant authoritarianism and tyranny, the colonies decided it was time for a new form of self-governance and the American Republic was born. Grit won the day.

On December 7th, 1941, Japanese suicide bombers attacked Pearl Harbor and drew America into World War II. Despite a major blow to our naval fleet, our military joined forces with the Allies in defeating Nazism and Fascism against great odds. Grit won the day.

On August 28th, 1965, Dr. King marched on Washington after decades of segregation and oppression of African Americans. Despite his assassination, the Civil Rights movement continued to notch victory after victory. Grit won the day.

On September 11th, 2001, terrorists hijacked multiple planes, flying them into American landmarks and ushering in an era of fear and global terror. After the World Trade Centers collapsed, Americans built One World Trade Center in defiance.  Grit won the day.

As of March, 2020, America is suffering from both a pandemic as well as a forced economic lockdown, with over 75,000 dead and 30 million jobless claims - so far. Since the beginning of the United States, there have been over 45 recessions, a civil war, two world wars, numerous foreign wars, countless terrorist attacks, a civil rights movement, a gold standard, a fiat currency standard - and this list barely scratches the surface of monumental moments in our nation’s history. American Grit has stood the test of time so far.  At Permanent Equity, we are betting on American Grit to get businesses, families, and communities through this period and to carry the torch long after this threat is defeated. We are firm believers in the strength of Main Street America and look forward to playing our part in the rebuilding phase of a post-COVID world.

A crisis playbook for family businesses (Harvard Business Review)

+ "The stress, anxiety, and fear that come out in a crisis can amplify already challenging dynamics, paralyzing decision making throughout the enterprise or causing conflict to spiral out of control. On the other hand, the crisis can be a call to action, causing family owners to “rally around the flag,” put aside their differences, and take actions that allow the business to survive. Our survey shows a split between those reactions: 29% have seen some negative impact on family relationships, while 24% have seen a positive impact (the rest have seen no change). The ultimate impact of the crisis on your family business will be substantially shaped by how you, as owners, respond."

The shape of post-Covid retail (Ana Andjelic)

+ "American Dream is closed. Six weeks ago, this seemingly cursed New Jersey megamall was gearing up to celebrate its latest addition, an indoor DreamWorks Water Park. The monster retail-entertainment complex featured attractions with names like Lemur Leap, Mad Flush, and Forbidden Waters Hot Tubs. With forty water slides and fifteen attractions over 8.5 acres, it is the largest indoor water park in the Western Hemisphere.  Or, it aspired to be."

Eastman Machine survived one pandemic and is determined to survive this one (New York Times)

+ "“It’s painful, and we never like to lay people off,” he said. “But otherwise there would be no company to come back to.” He has continued to pay for those workers’ health benefits, so he feels he has kept his word that everybody would be taken care of. On Monday, he brought back five assembly-line workers. Demand for the cutting machines that Eastman makes at its downtown factory is down 50 percent, but there have been enough orders to keep production employees on the job.""

M&A market condition survey - assessing the impact of COVID-19 (Dunn Rush)

+ "With regard to transaction volumes and valuations, it is our opinion that there will be a significant drop in the number of transactions completed between now and the end of 2020. To the degree the U.S. economy can begin the reopening process in the next few months, we believe the middle market M&A transaction environment should recover to a more “normal” environment by mid-2021."

The share of mortgage loans in forbearance increases to 7.54% (Mortgage Bankers' Association)

+ "The Mortgage Bankers Association's (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance increased from 6.99% of servicers' portfolio volume in the prior week to 7.54% as of April 26, 2020. According to MBA's estimate, a total of 3.80 million homeowners are now in forbearance plans."

Marie Kondo cleaned house. Now she wants to clean yours. (Fast Company)

"Over the past year, Kondo has been forced to negotiate the tension between her introverted personality and her desire to introduce her philosophy to larger audiences. Tidying Up With Marie Kondo, her Netflix series that launched in January 2019, went on to become the global streaming service’s most-watched nonfiction show of the year. Suddenly, Kondo was vaulted into a new constellation of stardom, alongside other goddesses of wellness and domesticity such as Martha Stewart, Oprah Winfrey, and Gwyneth Paltrow. By the end of 2019, she had established an e-commerce site, a blog, and a newsletter. She had also increased the size of her consultant network—people whom Kondo personally instructs in her decluttering method—to 40 countries."

Leading a family business (Harvard Business Review)

+ This is a useful compendium on managing, leading, and growing a family business from HBR. 

Developing the next generation of leaders in your family business (Harvard Business Review)

+ "Of course, some of the greatest family business leaders I have met in my executive search work over the past three decades have taken a completely different approach. Genuinely caring for the healthy future of both their firms and their families, they start by understanding how they can help their next generation become the best possible versions of themselves. They aim to firm up their company’s “family gravity,” which includes the dynamics between relatives and their relationship with the business, with perpetuity as the main objective. This requires following a disciplined process with three simple steps."

The death of the office (1843)

+ "When time-and-motion studies examine offices today, their results can be dispiriting. Office-work takes up not merely the bulk of our time but the best part of it, the hours when we are alert and alive. Home, and its occupants, has the husk. Most managers spend at least 20 hours a week in meetings, according to a study by Bain & Company in 2014. Over the course of a lifetime that amounts to nearly five full years. Many of these meetings, in wistful retrospect, might have profitably been skipped."

How to die with $60M worth of the San Diego Chargers (San Diego Reader)

+ "With this week's death of Chargers minority owner George Pernicano at 98, his heirs may be looking at a $60 million payout from his 3 percent interest in the team, according to a back-of-the-envelope calculation by a Union-Tribune sports writer."

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