Postcards from the florida republic: An independent and profitable state of mind.
Behind the airport bar beside Gate 15 at the Memphis International Airport, you’ll see a skinny man with shaggy grey hair. He tucks his NBA Memphis Grizzlies tee shirt into a pair of Lee jeans. His belt is extra tight.
The bartender said he’d studied American history at Johns Hopkins University in Baltimore. Good man! I liked him already.
He’s in his 50s. He has a law degree. His kids went to some of the top schools in the country.
And at 11:15 on a Saturday, he’s serving Sam Adams or Tito’s Vodka to travelers out of Bluff City. An airport bartender’s salary is nothing to sneeze at… a good shift can pay far more than a lawyer makes. The customer traffic is steady all day.
Food and alcohol sell at a premium to a captive audience.
But is that why he’s doing it?
“I get to see people come and go,” he nods. Perhaps he’s more of a medical doctor, serving concoctions to nervous travelers and listening to their stories. This was a man who seemed free.
Contrast that experience with the one I had 15 minutes earlier.
My Uber driver lived in Memphis his entire life. He never left – and said he regretted never residing in North Carolina. He had a dream that he and his wife would move there… they would “find work.” They never did. He yearns for that freedom.
He was in his early 70s. He thought back to when he was 12, cutting grass in his town. He’d make $33 a week, jump on a train, and watch movies at a grand theater without supervision. Today he wouldn’t let his granddaughters ride public transportation alone. He blames that on the decline of Memphis.
Crime is rampant. He’s afraid when he drives downtown – even in the afternoon. Halfway into the conversation, he said: “I feel like everything that I thought was good is gone.”
No person should live in fear or regret.
I could sense that he carried a very heavy heart.
Right now, I’m listening to people –outside Florida. There’s a mixed sense. Some people are still optimistic and willing to play the entrepreneurial game passionately.
Others are giving up. They read the news. They see the corruption. They feel like the walls are closing in on them.
People shouldn’t live like this. Even more distressing is that they don’t know they don’t have to live like this.
They need to opt out of these places. To find greener pasture.
Paging Mr. Baldwin
I’d taken an earlier flight home to play Uno with my daughter before bed. She couldn’t wait to ride to the airport with my wife and pick me up. How good is that?
“It’s interesting,” the driver said as we arrived. “The older you get, the more you realize what’s important to you.”
Damn, right.
I ordered food after the usual security theater tap dance with the Transportation Security Administration (TSA).
But I didn’t have time to eat it. As the History Major/Bartender found a to-go box, a man in a familiar black leather jacket slid into the end of the bar and ordered coffee.
He’s one of my favorite writers and journalists in the nation.
Nick Gillespie at Reason has been consistent in his editorial quality for the years and years I’ve followed him. I was glad that I took that earlier flight because we chatted for a few minutes.
We talked about the Libertarian Party’s state and the 2024 election.
I’ll let you read Nick’s commentary. It’s worth your time.
My take was that it’s a movement with a compass… but without a map or a series of plans to implement. Perhaps that’s because different parts of the movement want to end in separate places.
At Freedom Fest, some groups wanted Texas to secede, a 20-year-old free state movement to move 20,000 people to New Hampshire (only 6,000 people have done so), and people who couldn’t agree on the future of vaccines, free enterprise, or substantive foreign policy. But they all agreed that the same problems exist. They’re the same ones we complained about in 2013.
So, the feeling you get when you leave is… “Okay… now what?”
When I appeared on the panel with Steve Forbes, he directly aimed at Big Government and this concept of “woke businesses.”
The word “Woke” is thrown around quite a bit.
I dislike the word “Woke” more than I dislike the term “Moist.”
Both terms make my shoulders contract, and I start to gag.
This “woke” debate (and a frequent subject at Freedom Fest) is not a hill I feel like dying on.
I moved to Florida. I am self-sufficient. I have my back to the sea. I’m somewhere between a character in a James Joyce novel and Jimmy Buffett. I prefer to focus on the things I can control: My health, wealth, and myself.
If I can’t fix those, how can I “fix the world?”
But as I meet people like economist Peter St. Onge at the Heritage Foundation, who has written on the subject extensively, I do realize these business strategies are incredibly impractical and don’t benefit investors. And that’s the problem.
They’re a misallocation of resources. It’s terrible economics.
Meritocracy and free markets lead to far better outcomes, a subject I discussed at length while in Switzerland.
I wrote a portion of my thesis in graduate school on the ongoing movement toward stakeholder capitalism – championed by BlackRock. I started tracking the transition at major business schools as they began teaching ESG, sustainability, and now DEI in their curriculum. This movement started in the wake of the 2008 financial crisis.
These policies have moved out of the liberal arts programs of undergraduate courses and spilled up into business schools, law schools, and other advanced degrees. This is how you end up with marketing teams that abandon their customers – because they want to apply the “stakeholder” theories they learned from professors who largely never dealt with customers.
I didn’t realize until now how important and timely that research was. I’ll dig it up, but if you’re in the Baltimore area, there’s a black leather-bound edition of my thesis in a Hopkins basement library that has never been opened.
A decade ago, I wasn’t opposed to companies engaging in their communities or ensuring sustainability. But like all things, movements like ESG get taken too far or morph into something worse.
Some companies need to remember the entire point of being public.
Are they even bothering to promote shareholder interest? They abandoned – even disrespected – their customers in the process.
This happened at Disney (whose park traffic has collapsed) and Anheuser-Busch. At the latter, a marketing director casually called their customer base “frat boys” and yearned for a more sophisticated audience that would never drink their product. They never apologized.
Time will show that you can’t adopt non-shareholder-friendly practices or insult your customer base before it fuels problems.
Which brings me to the “Okay… now what” moment?
How Do I Opt Out of This Insanity?
My job is to help investors opt out of these conditions…
But there must be a way to make money in the stock market and have confidence that the companies that you own aren’t going to cut off their noses and abandon their customer bases.
St. Onge, a former MBA professor, noted in a video Saturday that businesses have one job in marketing: “Make the customer happy to give you money.”
I look at it from a different angle.
Boardrooms (the CEO, CFO, and more) have another important job: “Make the investor happy to give you money for the long term.”
As a credit to Nick Gillespie, he offered another wonderful benefit to me for taking the earlier flight. He asked if it was possible to bring all this down to one single number.
In a Bill James-style approach, we can determine the companies and board rooms that are doing their jobs. Can we find companies focused on shareholders, financial growth, dividends, share buybacks… and doing the work that rewards YOU for investing in their future?
The obvious answer – at first - is the Piotroski F score. This is largely a measurement of capital discipline and growth.
Capital discipline has been the hallmark of oil-and-gas companies since 2018. Shipping companies have run their balance sheets very responsibly – especially the operators of the dry bulk world (they’re the ones shipping coal and grain).
But that’s just on the balance sheet side.
Republic Research will quantify that even more because it’s a fair question. If you knew that this company is committed to growing your investment – and avoiding distractions, you’d probably have more confidence as a long-term investor.
I’ll get to work. I hope you all have a wonderful weekend.
Stay alert,
Garrett Baldwin
Florida Republic Capital
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.