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It's March 1st, Five Ways to Profit from Today's Frothy Markets

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Today the Dow Jones Industrial Average closed at 21,068, up 15% since Election Day, with since that time more than $3 trillion in new investment wealth having been created.

This rally has been both deep and consistent, with almost all market sectors participating, and with market volatility levels at their lowest level in 34 years.

What is driving the rally is the hope that the aspects of the new administration's policies that are clearly pro-business, namely tax, regulatory, healthcare reform and infrastructure investment, will outweigh those that potentially are not - trade and immigration.

Whatever the long-term might hold, and let us always remember legendary economist John Manynard Keynes’ dictum that "In the long run, we are all dead," at this moment the “animal spirits” of capitalism are at a
very juicy high water mark.

So the smart and ambitious executive feels and knows that now is the time to just get after it.

So, on this March 1st, with all of the exuberance and confidence in the business air, here are five ways to take advantage:

#5. Sell Your Company. Rising public markets, with big companies flush with fresh equity and thus able to more assertively pursue growth-by-acquisition strategies, creates a virtuous trickle-down effect on valuations and business sale probabilities for even the smallest of firms.

Primarily, the acquisition targets of the public market big boys are mid-sized businesses - $100 million to $1 billion in transaction value.

These mid-sized companies in turn look to, via acquisition as well, improve their strategic profile and growth rate through seeking buyout targets with enterprise values of less than $100 million.

Both observing and participating in this uptick in buyer demand are private equity firms - sensing a shorter time frames to exits for their portfolio companies.

For sellers, the natural result of all of this buyer confidence and urgency is better pricing and faster closings.

These conditions won’t last forever of course, but right now is about as perfect a business sale climate as we have seen felt since the 1990s.

#4. Prepare to Sell. The above is all well and good, but the significant majority of companies are just too small and financially unimpressive to even consider being sold.

If your business falls into this category, then instead focus on preparing to sell through researching and then emulating the attributes of the more successful businesses in your market.

Even if this research yields just the “obvious” insights - i.e. that my business needs to make more money, have more predictable revenue, have a better brand, etc. - simply taking the time to make the comparison is almost always illuminating and actionable.

#3. Ask Yourself What is Wrong. Talented executives are usually well aware of what they need to do to grow their businesses to attain their strategic and financial goals.

But they just can't seem to get it done.

Their classic bugaboos have been the same since time immemorial - clients not buying as much, or as easily, or at as high a price.

And / or employees not performing well enough, or the better ones not sticking around long enough.

How about instead of blaming stalling growth on problem customers and employees we place it where it squarely belongs?

On the shoulders of our leadership.

The best executives, when they see that their prospects and the customers are the wrong ones, they pivot and instead pursue, secure, and service the right ones.

If their employees aren't performing as they should, they either fire them or usually far better identify and improve those aspects of their business culture holding everyone back.

Yes, let’s channel Harry Truman and
always have the buck only stop with us.

#2. Learn More, Complain Less. Whether one agrees or with the policies of the new administration, or finds irksome the personality of the new President, the incessantly negative and gossiping media coverage about it is mostly pointless and usually depressing.

Let’s instead listen to Bill Belichick, the most winningest coach in football history and “Do Our Jobs.”

Let's tune out all of the toxic noise and instead invest our “media time” in learning how to do more of what we as executives and business owners should always focus on above else - growing the sales, profits, and value of our companies. 

#1. Speed Everything Up. No one knows how long the current market rally and big leap in business confidence will last.

But it will come to an end.

And instead of riding this upward wave, we will be dragged down by a declining and fear filled market.

So while the going is good, let’s act.

Let’s write that business plan. Launch that new sales campaign.

Make that new hire. Invest in that new product.

Do so with care and preparation and precision for sure, but absolutely don’t wait for things to be perfect before you do so.

We are in arguably historically good markets.

Shame on us all if we don't fully take advantage.

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