CAPITAL IDEAS: Perfect 10
Dalton — The technology-heavy NASDAQ stock market index closed out last week with a perfect 10 weeks in a row of gains. The last time that happened was 1999, during the peak of the Technology Bubble. Since the index’s 1971 inception, this was only the ninth such streak. That’s a long winning stretch for the market to run without interruption and you might think it is due for a breather. However, of the eight prior streaks, six of them went to 11 or more weeks. I know—one more week is hardly something to write home about, as my mom is fond of saying.
I usually am warning you about the madness of crowds at extremes, and how an overly optimistic market is a risky market. But from a historical standpoint, we may not be there yet. Of those eight prior perfect 10-week streaks, the average returns for the NASDAQ were 1.07 and 2.23 percent, one week and one month later respectively. Even more impressive is that three months later, the index was up an average of 10.09 percent. However, a year later, after some price drops, it was up only an average of 4.38 percent. So too much of a good thing can be bad for you.
Without the blah, blah, blah of the numbers, here’s the summary. The market has been so good that it’s likely to keep being good for another few months as investors move from the sidelines back into stocks. But after that, brief declines in stock prices wouldn’t be unlikely.
Brief declines notwithstanding, economic fundamentals support the historical evidence of price support for the stock market. Near the top of the economic fundamentals food chain is labor market strength. The next release of labor statistics will be this Friday, March 8, and there is no reason to think that we’ll see anything other than what we have seen: unemployment low, hiring robust. But with the good comes the bad. Companies are having trouble hiring skilled labor since so many are already employed. On the other side of that coin, employees are confronted with options of jumping ship to a new employer. That is overall good news for workers, but it can be scary to consider moving away from the familiarity of your current job to a new opportunity.
My firm sees both issues. On April 11, we’re partnering with the Associated Industries of Massachusetts to host a roundtable discussion, open to the public, called “Finders Keepers: Hiring and Retaining Skilled Employees.” Then, the following week, on April 17, we’re the lead sponsors of 1Berkshire’s Career Fair 2019.
If you’re a business owner or in charge of hiring, we’ll give you plenty of advice at Finders Keepers and we hope to see you there. If you’re unemployed, underemployed or gunning for an external promotion, the Career Fair will help you. In order to maximize your success, let’s consider how to best approach your job search.
There are offensive and defensive strategies to moving up the corporate ladder. Defensively, think about it like dating. You are being interviewed in a hot job market. The economy favors employees today, not the employers. While you must still be professional and tactful, now more than ever you are interviewing the employer even more than they are interviewing you.
My firm publishes the Berkshire Business Confidence Index and across the board for the last two years, the survey of some 4,000 area businesses reveals that their biggest pain point is trying to find skilled workers (the second biggest pain point has been rising costs, but even with that concern, they still want to hire you).
Quite often a job interview can feel like an interrogation to the job seeker. The employer has all the control. But nowadays the employer is doing their best dog-and-pony show to woo you. You’ll be flattered. You’ll be complimented. You’ll enjoy some wonderful rounds of first dates with your potential new boss telling you how beautiful you look and not so subtly letting you know all of their good qualities.
Taking that new job is a commitment. It’s not necessarily marriage, but you have definitely moved in together. You want to talk not just to the upper management conducting the interviews, but also to potential coworkers, especially if you’ll be filling a position where others have similar roles and responsibilities. Not only is it a small ask on your part, but you can frame the request in such a way where it’s presented as a benefit to the firm: “A new employee is a new personality and not only do you, dear hiring manager, want to let potential new workmates gauge if I’ll fit in, but it will let them feel empowered that you ask for their input.” In reality, though, you’ll be making sure you’ll like the people you’ll be working with, and that the people signing the paychecks treat them well.
But don’t let the fact that it’s an employee’s market go to your head. Approach the interviews like you want the job—don’t play hard to get. Let the employer know you’re interested, but be sure to express that, even if it’s the right cultural and skills fit, you’d have concerns foregoing certain benefits. Don’t overplay your hand, but be sure to discuss salary requirements and perquisite needs. Let the employer know you’re interested in considering an offer, and if they do wish to present you with one (don’t be presumptuous), that you’d appreciate a follow-up conversation to discuss the details. It’s a completely legitimate request and allows you to negotiate a counter offer in person. Don’t press for too much; business owners don’t like bullies who try to overly play their hand (I’ve seen valuable workers get fired for that). And when you do ask for something more, be sure to offer something in return. If you want a higher salary, be prepared to accept longer hours. If you want paid travel and education, explain how it benefits the company. You’re not just dating at that point; you’re talking about a commitment. And commitment is about compromise. Ask for what you want, but be flexible. Interview the company as they are interviewing you, but be professional. Be prepared to say “no” in a manner that allows you to come back to the employer another day. Not every opportunity, even the best ones, is timed well.
Allen Harris, the author of ‘Build It, Sell It, Profit: Taking Care of Business Today to Get Top Dollar When You Retire,’ is a Certified Value Growth Advisor and Certified Exit Planning Advisor for business owners. He is the owner of Berkshire Money Management in Dalton, managing investments of more than $400 million. His forecasts and opinions are purely his own. None of the information presented here should be construed as individualized investment advice, an endorsement of Berkshire Money Management or a solicitation to become a client of Berkshire Money Management. Direct inquiries to email@example.com.