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Episode Summary
Every owner I talk to right now is asking the same question: when does the hammer drop? You’ve got cash on the sidelines, you’re hearing the chatter at every peer group, and nobody can tell you whether 2019 is the year to sell, the year to buy, or the year to hunker down. Your CPA does taxes. Your banker watches the line. Nobody is sitting at the chart with you mapping what the next ten years actually look like for the business you’ve spent your life building. That’s why I brought Alex Chausovsky from ITR Economics on. ITR publishes its accuracy rating every year (94.7% twelve months out, kept for 30+ years), and Alex walked me through the near-term call (a 2019 slowdown, mild and short-lived), the longer-term call (a Great Depression-level downturn in the 2030s driven by debt and demographics), and what an owner-operator in their late 50s or early 60s should actually do about it. We got into why recessions are predictable on a 10-year cycle, why personal consumption (two-thirds of GDP) reacts to tariff-driven inflation, why Millennials outnumber Boomers but won’t take the open jobs, and why the best move for an owner nearing exit may be to sell into the next peak and have the cash ready when assets go on sale.
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## Top 10 Takeaways- Recessions arrive on a roughly 10-year cycle. If you’re planning your exit in a vacuum, you’re guessing.
- Your business cycle has a heartbeat. Technology doesn’t change it. Population, rule of law, and resources do.
- Personal consumption is two-thirds of GDP. When tariffs raise prices, demand slows, and your revenue line feels it first.
- The labor shortage isn’t a body count problem. Millennials outnumber Boomers. They just won’t take the trades.
- Sell into the peak, not into the slowdown. Time your exit to the cycle, not to your birthday.
- The best-positioned owners in 2008 had cash, low debt, and a buyer’s mindset. Be that owner before the next one hits.
- Wealth preservation and wealth creation are different games. Know which one you’re playing before you allocate.
- Federal debt servicing will soon exceed military spending. That’s the math driving the 2030s call.
- Public companies optimize for quarterly stock price. Don’t run your private business the same way.
- Start the exit prep now even if you’re five years out. The runway is always longer than you think.
Sound Bites
“100% of the companies on the planet that I’ve ever met are underpriced.” (@TBD) — Alex Chausovsky
“Recessions or downturns in the US economy are actually quite predictable. All you have to do is look back at the last 40 years and you can kind of see this trend emerge.” (@TBD) — Alex Chausovsky
“Try to find a way to leverage people’s optimism to your advantage. Look at the economy, track it, see where it is in the business cycle, and then have the timing mechanism be that you want to sell your business during a high period.” (@TBD) — Alex Chausovsky
“Recessions represent a tremendous opportunity. Think about the people that were positioned well for the ‘08-‘09 downturn. They had just sold their business in 2006 or 2007, they had a lot of cash on hand, very little debt, and they were able to buy up assets for pennies on the dollar.” (@TBD) — Alex Chausovsky
“People behave the way that they are incentivized to behave. When the decision makers of these public companies are compensated primarily in stock, of course they’re going to focus on getting that stock price up.” (@TBD) — Alex Chausovsky
About This Episode
Alex Chausovsky is a Senior Business Advisor at ITR Economics, the oldest privately-held continuously operating economic research and consulting firm in the US. Born in Kyiv and educated at the University of Texas at Austin, Alex brings a practical business-application lens to economic forecasting rather than pure academic theory. Before ITR, he was a lead analyst covering 3D printing and additive manufacturing for a major consulting firm. ITR publishes its accuracy rating every year (94.7% twelve months out, sustained for 30+ years), and Alex works one-on-one with companies to build sales forecasts off their own data and ITR’s leading indicators. This episode lands in the iBD canon as the macro lens an owner needs sitting next to the financial model.
Resources Mentioned
- ITR Economics — Alex’s firm and the source of the forecasts referenced throughout. — itreconomics.com
- DataCast — ITR’s web-based tool that matches your business data to leading indicators. Free trial mentioned in the episode.
- Prosperity in the Age of Decline by Alan and Brian Beaulieu — The ITR book on positioning yourself before the 2030s downturn.
- Ray Dalio — “How the Economic Machine Works” — Ryan’s reference for the 30-minute cartoon that explains debt cycles.
- Factfulness by Hans Rosling — Ryan’s reference for the global population and standard-of-living trend data.
- Alex Chausovsky on LinkedIn and Twitter — Twitter handle: @AChausovsky. Email: achausovsky@itreconomics.com
Connections
Phase + Module:
- Module 4 — Sustainable Financials — The financial model is where the macro forecast becomes an ownership decision
- Module 1 — Ownership Goals — Exit timing is an ownership goal, not a market reaction
Milestones:
- Milestone 12 — Five-Year Forecast — Where the macro cycle gets translated into your own numbers
- Milestone 13 — Strategic Plan — Cycle-aware planning instead of annual tax planning
- Milestone 6 — Transaction Value — Timing the sale into the peak instead of the slowdown
- Milestone 7 — Value Growth Plan — Multi-year value creation against a known macro backdrop
Concepts referenced:
- Three-Statement Model — The instrument that translates macro pressure into operating decisions
- Free Cash Flow — What you protect when the cycle turns
- Owner’s Scorecard™ — The constraints exit timing rolls up to
- Value Gap — The space between today’s value and what an exit requires