Three news items highlight again life’s lessons never learned. Let’s go again to the white or black board. First a plumber in London has just sold his plumbing business and pocketed £100m. Leaving school at 15 without qualifications Charlie Mullins was sufficiently savvy to recognise he was not an academic but went off to get a trade, a skill set that was a global passport. The snobs decry the tradesmen but these are the people that forever work. Toilets block, taps drip and in the end Charlie made the ultimate connection when KKR bought his Pimlico Plumbers. First lesson if you don’t have an academic bent get a trade and be proud of your expertise.
Second lesson, Evergrande the Chinese Property Developer with $300 billion of debt is about to default. The model buy land, build and sell houses only works for so long and building Property Empires on debt will at some point fail. When the cash flow slows or goes so does the Company. Tumultuous debt is not an insurance policy. Failure will come. Second lesson debt is a curse not an asset, build your business slowly but solidly.Houses are for living in.
On the subject of money and pipes now let’s talk Gas. So called Energy Companies who are at best broking gas and trying to grow their business off ever cheaper contracts will fail. Living off customer deposits is ruinous for all. Today a dozen of such companies are insolvent and prices will rise. The prices however will only rise to their true market level off the economic certainty of supply and demand. Why are we surprised when products are sold on the cheap. Cheap is never sustainable . Give me gas not gimmick. Third and final lesson if it looks to good to be true it won’t be. Fair and proper deals last.
History as they say repeats itself because no one ever listens. These are just three of the lessons never learned.
qbitblogger 