Thoughts on Depression 2.0

Spending some time quietly sitting, reading and contemplating what’s going on right now, I think there are some notes of optimism.

Software – I think a significant chunk of software development is safe – much of modern corporate software development is either about saving money, making more money, making things easier (and thus saving money), or watching things closely (reducing the amount of money lost to waste). All of those initiatives are even more important right now.

Lower-cost Entertainment – I think we’ll see fewer trips to the movies, fewer visits to restaurants, and more entertainment-in-the-home. I.e. computer games, TV, Cable, Online entertainment and DVDs – especially things that can be seen more than once. Look for the price-per-hour of entertainment to drop.

Groceries & Foodstuffs – More home-cooked meals and/or home-prepared meals. Many restaurants are going to wither and die, especially on the high end.

Health Care – people will continue to pay lots of money to stay alive. I don’t think it will grow a lot, but it will still make money.

Any company with lots of cash and some foresight – if you have a lot of money, you can ride out a lot of bumps that kill your competitors. You can pay discounted rates for advertising (see below) because no one else is buying.

And some notes of pessimism:

Manufacturing – I think there’s no upside here – the floor has dropped out of the superfluous vanity purchase market. Large, expensive equipment manufacturers are going to struggle with expensive credit. Small item manufacturing may do ok, especially if they make guns, dog food, etc. 😉 I think the key here is products that save money or make people feel safer will do well.

Home Building – ’nuff said. Too much inventory and too few buyers with good enough credit.

Car Manufacturing – People will stick with their old clunkers, unless they’re really getting crappy gas mileage, but the drop in oil prices undercuts that.

Advertising – It becomes more of a luxury, when the customers are fighting to survive. It won’t be a huge drop, because of smarter buyers (see above), but Google will probably hurt a bit here.

Consulting – Unless you’re clearly helping a company save money, or make more money, you’re probably going to struggle.

Advertising – I think it’s going to take a massive hit.

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