Even though we are a small privately owned company, and are not required by law to do this, I like to do a quarterly update for all the people that read the blog and want to acheive greater success in life. It allows me a chance to talk about what worked, what didn't work, and why it matters to me and you. Without delay, let's get going.
Overall, MIG acheived solid growth in the quarter and is on pace to achieve our yearly goals. Both profit and acquisitions look good right now and assuming the economy holds up, things look even better heading into the rest of the year. We do have concerns of a correction or pullback in the 2nd quarter, however.
We will finish the first quarter of 2017 with holdings in 12 different companies. During the quarter we passed on 3 different investment pitches. All 3 centered around a retail environment. 2 involved restaurant concepts, one involved a retail store.
With the closing of many stores at major retailers, we do not have interest in anything that currently bases it's projections and growth off of people coming into the store. It doesn't seem to be working for anyone right now. If you absolutely have to be in retail, I would suggest Wal-Mart and Kroger. Both are aggressively expanding their online presence to take on Amazon. Wal-Mart specifically has changed it's focus on fresher, better food. Kroger is best in class.
We have no interest in regards to restaurants as well. There has been a major shift away from fast food for years, and until someone can figure out what the consumer wants (other than online ordering), we do not see growth occurring in these industries. There is a conscious focus on diet in America today. McDonald's, Burger King, and Wendy's aren't growing like years past. Casual dining like Applebee's and Olive Garden have been slowed as well. Too much competition and not enough transparency for the customer yet. Pink slime and unknown ingredients are just beginning to change the landscape I am afraid. People want to know what is going in their body.
We also believe all the hype around legal marijuana is way too early. While we do openly admit to being invested in the "weed" business, there are so many hurdles to overcome yet as it pertains to regulation and banking. Federal banks can not touch weed money as it is still illegal under federal law. Ignore all the hype and take small positions wherever you care to invest. A lot of hurdles left to overcome here. We will all be wrong before it sifts out and a market leader comes forward. It may be 10 years before anyone producing a marijuana product becomes a household name.
We do have holdings in several companies that have growth happening and we are excited to be in certain lines of business.
Affordable housing continues to be an issue in the current economy. With the rebound in home prices, more people are being pushed out of hot markets. We are glad to be invested in a company that is working towards that solution. More people come to America every year, they need housing.
We also see growth in drones and affordable, personal aircraft. While it is hard to imagine $250,000 being "affordable", it will open the doors to small families and flying. First adopters will have to be upper income owners such as business owners, doctors, and lawyers. This has a similar issue to marijuana, who is the name brand in this market?
We also have holdings in oil, gas, silver and gold. None of them has performed well this quarter, and a slow road to recovery is probable. Oil and gas is profitable at $50 per barrel for the right companies. Gold and silver are inflated on Trump and economical concerns. Both should have a place in your holdings, but I do not suggest being overly exposed yet. There will come a day when oil is king again. We are not there. Gold and silver are always important to own in physical form. Do not invest in ETF's or holding companies. Buy the real stuff and keep it tucked away.
The economy overall is continuing it's sluggish "growth". The market is fully valued and a pullback needs to happen sometime in the 2nd quarter. Companies can not continue to grow quickly in a slow economic environment. It's time for a reset and this can be very beneficial to you. This will open up some opportunities to buy things on sale. Have a list of what you want to own and wait for the opportunity.
Make 2017 memorable.