Narratives

And there used to be a ballpark, where the field was warm and green.
And people played their crazy game with a joy I’d never seen.
And the air was such a wonder, from the hot dogs and the beer.
Yes there used to be a ballpark….right here.

Now the children try to find it, and they can’t believe their eyes.
‘cause the old team just isn’t playing, and the new team hardly tries.

And the sky has got so cloudy, when it used to be so clear.
And the summer went so quickly this year.

Yes, there used to be a ballpark….right here.

There Used to be a Ballpark  -  Frank Sinatra

…..

I remember a time when a company needed to earn money. You know, actually make a profit with real cash flow, in order for the executives to make money. Sell a product or service for more than it costs you to produce. If the company didn’t make any money, neither did the executives.

Today, that seems so old fashioned.

During this recent period when money has been free, profit was not necessary. In some cases, it was even frowned upon. All you needed was a good story. A narrative. And the world would rush to your door with buckets full of cash upon which they were otherwise earning nothing.

I know of someone who was romanced by venture capital funds a few years back. “Don’t even think about profit,” they told the entrepreneur. “Just show sales growth and the market will pay huge for that.”

I know the CEO of a company that went public with an oversubscribed IPO a few years ago. The company bleeds cash in the hundreds of millions quarterly. But, they promise that someday, off in the distant future, their product will be in such high demand that they will eventually make money. Someday. That CEO recently bought a $20 million house. He is running a company that has never made a profit and, in my opinion, never will. The investors may eventually lose everything. But the founder is already very wealthy from the IPO. You see, he sold a story. A narrative. And that’s all he needed to do to make a lot for himself.

This is all backwards and I don’t think it will last. The value of a good narrative today is much higher than a solid company providing a product or service for which there is current demand and which makes good and regular profit. I know some of those companies. One that makes gravel for roads and construction. Another that pumps natural gas. Nobody seems to care about or for those profitable businesses. The “narrative” that we make an essential product and sell it for more than it costs us just doesn’t connect with the business media, which like the political media, has their own agenda and narrative to promote.

Now, as they say, the chickens may be coming home to roost. FTX and SBF and the many billions being lost on that story are raising eyebrows. There are over 250 public companies that do not have enough cash to last 24 months at their current rate of cash burn. Many of these are names you know and still have high market valuations based on their narratives.

At some point in the future, maybe the near future, a lot of the narrative buyers may realize that they just bought the 21st century equivalent of snake oil. When they do, they will turn back to that old fashioned idea of looking for a company that makes a product or service that people want and can sell it for more than it costs them to produce.

Narratives have not just dominated business of late. They also dominate politics and the media.

There was a time when a policy would be put in place and if it didn’t work, even those who supported it would move on to a new idea.

No more. The most egregious example is the climate change narrative. Trillions has been spent on “green’ initiatives worldwide. Even the most ardent proponents admit that nothing of any meaning has been accomplished. But, money has been squandered and economies burdened. Still, the narrative of the need to “go green” for climate change marches on.

The propaganda media mavens love narratives. They have a set of them. Everything they do or report is intended to fit within the narratives that they want to promote. Therefore, no accountability for the success of policies driven by the narratives is necessary. Every policy can fail dramatically, and the narrative just keeps on promoting that which has failed.

Eventually, all of this will run out. It has to. Companies can lose money until investors stop feeding the beast. Policies (like Covid lockdowns) that don’t work or create more pain than they relieve, will at some point cause the public to rise up in protest. We are even seeing that happen in communist countries like China as I write this.

Unfortunately, none of this will happen as quickly as it should. In the meantime, some of the unworthy will be enriched and many others will lose and suffer.

Don’t be one of them. Don’t fall for a narrative and don’t promote one. It is important to look through the narratives you are being spoon fed to see what is real and what is just promotion. Buy and support real policies and businesses and demand that they produce genuine happiness and cash flow. It may take time, but you will be in the right place.

The Sinatra song with which I began this missive is one of my favorites off the wonderful Ol’ Blue Eyes is Back album. It is a beautiful and melancholy lament. The song does not say this, but people still want to play ball. There can be another ballpark, maybe in a different place. The team can play hard and the sun can come out. And people can play with joy in their hearts. It just takes time and the will to do so.

I remain respectfully,
Congressman John Campbell
Drive Fast and Live Free