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Volume 23, Number 32 Copyright 2006 Business Book Review, LLC All Rights Reserved

The Well-Timed Strategy

Managing the Business Cycle for Competitive Advantage

Peter Navarro
2006 by Pearson Education, Inc. Published by Wharton School Publishing ISBN: 0-13-149420-1

Reviewed by Susan Williams

Introduction
When plotting strategy to achieve competitive advantage, many companies fail to take into account the importance of the business cycle. The business cycle revolves around economic movements that ebb and flow between recessionary troughs and prosperous peaks. This cycle is arguably one of the single most important determinants of corporate profitability and stock price performance. The Well-Timed Strategy addresses what author Peter Navarro refers to as Master Cyclist principles and explains how well-timed strategies and tactics can be used to manage the business cycle for competitive advantage. This book delves into a vast range of considerable opportunities to help corporate teams gain an edge over business rivals during both recessionary and expansionary phases of the business cycle. Real-world examples demonstrate the management and mismanagement of the business cycle, and teach business executives how to improve their companys stature and performance.
Business Book Review Vol. 23, No. 32 Copyright 2006 Business Book Review, LLC All Rights Reserved

The Well-Timed Strategy

Peter Navarro

PART I: STRATEGIES AND TACTICS OF THE MASTER CYCLIST EXECUTIVE

Key Concepts
Well-Timed Strategies of Master Cyclist Management 1. Human Resources Management: Protect your high-skilled workforce during recession. 2. Production and Inventory Control: Anticipate recession and recovery and macromanage production and inventory. 3. Marketing and Pricing: Adapt product mix and advertising messages to fit the business cycle. Raise prices in good times. Cut prices in bad times. 4. Risk Management: Hedge commodity price, interest rate, and exchange rate hikes by using options, futures, and swaps. 5. Capital Expenditures and Finance: Protect cash flow by countercyclically cutting capital expenditures in anticipation of a recession and increase expenditures during the recession in preparation for recovery. 6. Acquisitions and Divestitures: Tactically time key strategic acquisitions and divestitures to the stock market cycle. * * *

Timing is everything. The Master Cyclist deploys well-timed strategies and tactics encompassing functional areas of marketing and pricing, production and inventory control, and human resource development. In addition, these strategies and tactics should focus on risk management, implementation of capital expenditure programs, and the tactical timing of acquisitions and divestitures. The Master Cyclist fully understands all major aspects of the modern corporation and how to incorporate strategies to achieve peak performance. When anticipating a recession, companies need to preserve cash flow. Businesses can help to do this using two strategies. Cutting capital expenditures when anticipating future market down turns is known as a defensive strategy. Increasing capital expenditures during a recession in expectation of future recovery is an offensive strategy. Using this countercyclical method, Master Cyclists can position their businesses to stay afloat and create competitive advantage, often with new production capacity, expanded sales outlets, innovative new products, and lower cost supply chain technologies. Contrary to popular notions, a recession is a good time to widen the labor pool, when there are usually the most skilled and available workers. Once the market changes, companies can deploy a more expansive and skilled work force with lower labor costs than its competitors. In the area of production and inventory, business cycle-sensitive Master Cyclists can ramp up or ramp down their production at the first signs of recession or recovery, requiring a dynamic macroeconomic process that enables companies to stock shelves with the latest products in a short period of time as the economy improves. Through the various business cycle seasons, marketing and pricing can also help build competitive advantage. For example, Dell, a startup company in the personal computer market, increased its advertising during a recession, and continued to build its brand and increase its market share. During a recession, ad rates are lower and there is less competitive activity in the market place. Its also effective to be able to change marketing messages and the product mix to keep up with dynamic market fluctuations. Often during a recession, customers are more focused on value

Information about the author and subject: www.peternavarro.com Information about this book and other business titles: www.ft-ph.com Related summaries in the BBR Library: Reinventing Strategy By: Willie Pietersen Every Business Is a Growth Business By: Ram Charan and Noel M. Tichy

than style. This focus may indicate the need to change the message about products, or make actual product changes. Because the business cycle can be risky, many companies implement futures or options to neutralize risk with movements in commodity prices, and interest and exchange rates. Beyond deployment of futures and options, Master Cyclists use two significant risk management

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The Well-Timed Strategy

Peter Navarro

tools: business unit diversification and geographical reason this strategy can work is because companies can diversification. position themselves with many new and innovative products In business unit diversification, a company may in preparation for the next economic recovery. expand its offerings into a different direction, but use the A good example of the use of an aggressive same components for both offerings, resulting in lower countercyclical capital-expenditure strategy to fuel product unit costs. innovation is that of Intels corporate philosophy and In geographical diversification, expansion into new culture. Over time, Intel has consistently used economic foreign markets may help businesses achieve greater downturns in the business cycle to develop new products economies of scale and take advantage of a broader range and position itself for future expansion. During the of opportunities. This type of diversification can be beneficial ...the line between corporate success and failure is now being because business cycles and drawn by the ability or lack thereof of the modern executive team to first understand the business cycle in all of its strategies political situations in different and tactical richness and then proactively manage that cycle for countries do not always match competitive advantage. each other. Therefore, there may be prosperity in one part of the world, while another region 2001 recession, Intels competitors were cutting back in copes with recession. important areas while Intel created new products, opened new plants, increased its production capabilities, and PART II: COUNTERCYCLING YOUR CAPITAL invested heavily in new technologies to ready itself for EXPENDITURES market recovery. Countercycling and preemptively reducing capital During 2001, Intel accelerated its capital investments, expenditures in the expectation of a recession can enhance spending $7.3 billion, compared with nearly $10 billion in profitability. While over-aggressive capital expansion can capital spending over the previous two years combined, increase debt over time, it can be beneficial to invest heavily according to Intels 2001 Annual Report. In addition, Intel when interest rates are low and credit is abundant. The invested $3.8 billion in research and development. After the 2002-to-2003 recovery, Intels revenues increased by 13 About the Author percent, with net income rising by 81 percent.
Peter Navarro is a business professor at the University of California-Irvine and author of the bestselling investment book, If Its Raining in Brazil, Buy Starbucks. His unique and internationally recognized expertise lies in his big picture application of a highly sophisticated but easily accessible macroeconomic analysis of the business environment and financial markets. His articles have appeared in a wide range of publications, from Business Week, the Los Angeles Times, New York Times, and Wall Street Journal to the Harvard Business Review, the Sloan Management Review, and the Journal of Business. Professor Navarro is a widely sought after and gifted public speaker. He has appeared frequently on Bloomberg TV and radio, CNN, CNBC, and NPR as well as on all three major network television shows. PART III: THE ACQUISITIVE MASTER CYCLIST BUYS LOW AND SELLS HIGH

From the perspective of a Master Cyclist, it doesnt make sense to make an acquisition impulsively if the stock price is too high. However, there are often strategic reasons for acquiring another company. These may include the opening of new markets, ownership of complementary technology, or even elimination of a key rival. With a strong understanding of the business cycle, with related stock market and interest rate fluctuations, it is easier to time acquisitions and divestitures for success. Often companies will do the opposite of the buy-low-sell-high concept, taking the acquisition plunge at the worst time. Sometimes this happens in bull markets where the focus is not on long-term competitive costs, or where there is the assumption that heavy debt at high interest rates can finance

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Peter Navarro

the deal. Businesses that buy high could face cash-flow and bankruptcy problems in the next recession. Telecom gear maker Nortel Networks made the mistake of worrying more about its rivals than looking for accumulating signs of the upcoming 2001 recession. In

One example of successful expansion during a market downturn is Avon Products. Avon is the worlds largest door-to-door cosmetics provider. The company understood that in a weak economy, there would be a larger pool of talented workers in addition to an attractive market of women unable to afford departmentThe faster inventory turns, the lower the holding costs, and the better your cash flow. This implies that, when a business store cosmetics. Through recruitment becomes totally efficient at managing its inventory turnover, the by representatives during the 2001 ratio will be an invariant horizontal line over the course of the recession, Avon was able to expand business cycle. its workforce by nearly one third. Its countercyclical hiring strategy resulted the late 1990s, Nortels customers began demanding highly in a share increase of 16 percent, while sales grew by twice sophisticated gear resulting with Nortels rapid acquisition the historical average with a net income increase of 20 of strategic assets. These assets would expand its product percent. line, fill in technological gaps needed to service the A number of defensive tactics can be deployed to Internet, and win the race for market share. protect a companys workforce during a recession. This In the 12 months leading up to the 2001 recession, may include offering employees financial incentives to take Nortel acquired 12 companies when the cost of acquiring education sabbaticals or other forms of leave in order to cut these new companies soared to outrageous heights. As a costs and preserve the employee relationship. This tactic result, the company ended up losing $75 billion in market can help sustain high employee morale, keep its knowledge capitalization, while 50,000 employees lost their jobs. workers, and prevent the competition from hiring these The mastery of buying low and selling high workers, potentially stealing the companys ideas. distinguishes Master Cyclists from Reactionary Cyclists, using this approach to generate cash, while advancing PART V: MACROMANAGING YOUR PRODUCTION, strategic goals. INVENTORY, AND SUPPLY CHAIN According to Navarro, the most important quality of A large inventory overhang increases holding costs, the well-timed acquisition strategy is ruthless patience, as and can leave companies with obsolete products. As a opposed to irrational impetuousness. Simply sitting out recession approaches, companies that increase production acquisition opportunities is often just as smart as buying and build up their inventories will suffer. Conversely, low and selling high. companies failing to increase production and build inventories in expectation of an economic recovery will PART IV: THE ART OF CHERRY PICKING AND not gain competitive advantage. This problem in operation OTHER WELL-TIMED TACTICS OF THE HUMAN management is also the result of forecasting more sales RESOURCES MANAGER than expected, leading to levels of product and inventory Since people are a companys greatest asset, businesses in excess of the actual demand for the product. are smart to hire more people during the depths of a A micromanagement approach to business cyclerecession. At this point, Master Cyclists can cherry pick sensitive production, inventory control, and supply chain from a large labor pool, staffing their companies with the often results in a companys ability to be more in tune with most talented employees at bargain prices. As a result, todays global market. companies can gain critical competitive advantage. When managing production and inventory levels, Reactive Cyclists tend to hire heavily during economic companies must establish an internal or external forecasting expansion. When a recession hits, the company usually capability in order to anticipate business cycle movements. must lay off a large portion of its workforce, resulting in In addition, when this information is clearly available to the decreased morale and the loss of some of its best workers right decision makers, it must not be ignored. to rivals.
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The Well-Timed Strategy

Peter Navarro

One clear warning sign of possible trouble ahead is With inevitable alterations in customer moods an indication that inventories may be building faster than throughout the business cycle, the product mix and demand. This macroeconomic indicator is called a book-to-bill ...it is typically far more expensive to buy back market share lost to a ratio. These ratios compare the rival who aggressively advertises in a downturn than it is to hold on to that market share by maintaining the marketing budget. total dollars of product shipped in a given month to the bookings marketing messages need to be flexible enough to change. in the same month for future deliveries. Tactics to achieve ongoing changes include re-tailoring Achieving a high turnover ratio requires applying advertising and marketing messages, and shifting product several different types of micromanagement tools line with the re-targeted customers and markets as independent of the business cycle, such as warehouse economic conditions change. Companies that re-target operations consolidations, improved supply chain relations, their customers or market can ride the movements in the and the application of the latest scanning technologies. business, stock market, and interest rate cycles. It is also important for executive teams to macromanage their inventory turnover ratio. This approach requires PART VII: PRICING THE CYCLE AND MANAGING increasing the ratio by cutting production and reducing CREDIT AND ACCOUNTS RECEIVABLE inventories when indicators point to a possible recession. One of the most important principles in economics This process should result in maximized cash flow when is that raising prices in the face of price-elastic demand it is needed most. When indicators signal economic will decrease instead of increasing profits. Price elasticity expansion, companies should consider reducing their measures how sensitive buyers are to price changes. inventory turnover ratio by building up inventories, in When demand is inelastic, large price hikes will result in preparation for a roaring economy. Companies that can just a small decrease in demand, whereas elastic demand use these management techniques will be better positioned means a small increase in price will result in a big drop in the market compared to competitors. in purchases. To help insulate a company from business cycle Price-inelastic needs can include gasoline services, fluctuations, Master Cyclists often adopt a build-to-order medication, or doctors services. Price-elastic purchases and production-to-order strategy which means the business may be readily replaced if the price is too high, and might does not need to hold large inventories. Using build-toinclude restaurant meals, airline travel, or fresh produce. order and production-to-order systems, orders are not Subtle shifts in price elasticities over the business produced until the request has been paid for in part or in cycle must be recognized and heeded to avoid the common full. The benefit here is a strong minimization of business mistake of increasing prices in the face of elastic demand. cycle risk, and a means to seize market share from rivals So, to boost revenues and protect market share during when the economy moves into recession. recessionary times, Master Cyclists typically raise prices in expansionary periods. Ignoring this well-timed pricing PART VI: MASTER CYCLIST MARKETING strategy means that during a recession companies will try THROUGH THE BUSINESS CYCLE SEASONS to compensate for falling revenues by raising prices when When Master Cyclists use their marketing messages elasticities are rising. and pricing to fit customers changing needs across the Managing credit and accounts receivable is another business cycle seasons, they can achieve competitive crucial aspect of the pricing-the-cycle concept. In advantage. anticipation of a recession, corporations do well to tighten It is common, during recessionary times, for businesses credit and aggressively pull in accounts receivable. What to slash their advertising spending, as it is one of the easiest often occurs is that companies will become complacent cost-cutting targets. However, countercyclical advertising about extending credit and collecting accounts receivable can help build the brand and make more noise during a during the late part of an expansionary period, not quiet time, doing so through cheaper ad rates.
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The Well-Timed Strategy

Peter Navarro

anticipating a coming recession, and as a result, suffer from a significant decrease in profits. Leading up to the 2001 recession, telecommunications network gear provider, Lucent, became extremely cash strapped, hindering its ability to invest in the research and development required for it to maintain a competitive edge.

and tactical macroeconomic forecasting models to prepare them for a possible increase in commodity prices. Another risk companies take in an increasingly global economy is exchange rate risk. Exchange rate risk contains two components: translation risk and transaction risk. Translation risk describes the effect of converting currency such as the Euro earned Being able to profitably peddle ones wares through these abroad into dollars. The translation risk often gut-wrenching ups and downs of the interest rate cycle may be that products sold in a foreign, is one of the biggest challenges many interest rate-sensitive weakened economy cause these net companies face. profits to decrease. Many multi-national companies hedge against this exchange As the market moved into this recessionary period, Lucent rate risk by using currency market futures. continued to extend huge amounts of credit to high-risk Transaction risk takes place when companies commit startup companies, but when these dot-com establishments to purchasing foreign goods with the domestic currency went out of business, Lucent could not collect its account at some future point in time. To hedge exchange rate risk receivables. Again, its important for Master Cyclists to exposure, companies can deploy various conservative understand how to manage their businesses through the financial derivatives. However, speculative use of typical phases of the business, interest-rate and stock market derivatives can become weapons of financial destruction cycle and recognize the indicators of market changes. resulting in huge losses. This means companies are usually best off confining their use of derivatives to simple hedges PART VIII: PROACTIVE PROFITING FROM OIL rather than highly leveraged gambling. PRICE SPIKES, INTEREST RATE HIKES, AND Another point to consider is the process of navigating EXCHANGE RATE RISKS through interest rate cycles. When short-term interest rates In the area of risk management, hedging and leveraging rise relative to long-term rates, the result is what is called the specific risks associated with changes in commodity spread risk. The spread in this case is squeezed between prices, exchange rates, and interest rates involves the short- and long-term rates that financial institutions usually deployment of a variety of tools, such as: business unit and earn when borrowing funds at short-term rates and then geographical diversification, futures, options, and swaps. lend them at longer-term rates. Interest rates continually These tools can help balance out the risk, protecting against fluctuate over time. They will move up due to concerns loss due to price fluctuation. over inflationary pressures as well as the raising of shortOne of the biggest challenges companies face is hedging term interest rates by the Federal Reserve. If these interest the cost of commodity items such as raw materials. Take rates rise too quickly, the economy will plunge into a the New England Confectionary Company, for example, recession. At this point, interest rates will most likely fall which depends on granular sugar as its prime raw material with associated deflationary pressures. for making its NECCO wafers. A common method to The way to ensure protection throughout all phases hedge commodity prices of 100 tons of granular sugar a day of the interest rate cycle is to deploy a natural business is through the use of financial derivatives such as futures hedge. and options. These risk-hedging tools help companies Countrywide Financial, the largest independent lock in a specific price for that raw material in order to residential mortgage lending company in the United guarantee stable prices. However, a company may lose on States, did just this. Its two major business units are loan the hedge if the market price ends up being lower than the origination and loan servicing. Loan origination performs hedged price. Companies would still prefer a small hedging well when interest rates are low and falling. On the other loss over a larger loss that comes when the price for a raw hand, loan servicing performs well when interest rates are material soars. Master Cyclists are smart to use proactive high and rising. When these units are properly managed and
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Peter Navarro

balanced, a natural business hedge is formed against interest rate risk. Countrywide was able to maximize its strategy based on the countercyclical nature of these business units and produce a stable and growing revenue stream.
PART IX: WHEN YOU CANT BEAT THE BUSINESS CYCLE, HEDGE ITS RISKS!

Master Cyclists devote much of their time and efforts toward forecasting and anticipating business cycle movements. However, even if company predictions are 70 percent accurate, the Industry models, competitors, technologies, customer other 30 percent can lead to bankruptcy. preferences, input costs, and productivity all change over time. Therefore, seeking to hedge business Failing to understand that your business model will have to cycle risk is a positive strategy. Effective evolve is the deadliest mistake a management team can make. hedging strategies include business unit generate large profits, earnings, and cash flow, as well as and geographical diversification as well as outsourcing reduce costs along the supply chain. and offshoring various elements of the manufacturing and supply chain. Business unit diversification, in addition to PART X: SURVIVING AND PROSPERING FROM hedging business cycle risk, can achieve greater economies THE ECONOMIC SHOCKS OF WAR, TERRORISM, of scale and scope. DROUGHT, AND DISEASE Federal Express demonstrated a sophisticated Random macroeconomic shocks such as terrorism, understanding of the business cycle risk by employing disease epidemics, and war inflict danger, but also offer a business unit diversification strategy. The company, opportunities. Well-timed strategies and tactics can help which had depended entirely on airborne express delivery, companies adapt to often logical after effects. diversified its business into ground-transportation Southwest Airlines swift tactical response to 9/11 shipments. Before that, Fedex would lose ground-shipping resulted from expressions of good will, a flexible marketing business to its rival, United Parcel Service. and pricing strategy, and confident maintenance of its Fedex re-organized its operations to become a oneworkforce and flight schedules. The same day of the 9/11 stop shop for customers, by upgrading its ground-service attack, Southwest enabled passengers with confirmed technology and creating a network of units that could handle reservations to request a full refund, regardless of the overnight air shipments, ground delivery, regional freight, travel date. After this macroeconomic shock, Southwest customs, and other services. increased its market share, and enjoyed elevated stock prices Another way to reduce business cycle risk is to in addition to turning a profit in 2001. implement a geographical diversification strategy. Again, In the case of an oil price shock, Progressive Insurance companies can achieve greater economies of scale by used the occurrence of higher oil prices to lower its auto diversifying into foreign markets as well as deploying insurance rates, and in so doing, proved a well-crafted and their core skills across a broad range of opportunities. well-timed strategy to seize market share. The company Geographical diversification can be effective because was able to exploit this opportunity because it sought to business cycles and political conditions of various countries forecast movements in oil prices. As a result of its reduced do not perfectly correlate. This means that, while Europe or rates, Progressive increased its revenues more than 24 Japan may be experiencing a recession, China or the United percent. Its profit margins increased seven percent, which States may be in the middle of an economy on the rise. was twice the three-percent average industry margin. Selectively outsourcing and offshoring non-missionThe ability of companies to use sophisticated forecasting critical elements can help companies reduce their business models can lead to executive teams that have a global cycle risk. Outsourcing means companies have work done macroeconomic perspective as well as basic logic.
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for them by another company, or by people other than the full-time employees. Offshoring refers to work outsourced to other countries. While these approaches can reduce the business cycle risk of maintaining specific workforces, there are still some risks. As mentioned earlier, it is probably wise not to outsource mission-critical elements of a business or to offshore to a country rife with political instability or lack of expertise. However, outsourcing and offshoring can still be viable and beneficial strategies to help companies

The Well-Timed Strategy

Peter Navarro

War, terrorism, and unexpected droughts and disease represent new and different opportunities in a changed economy. There may be a need for bomb-detection equipment, increased demand for medicine, and new vaccine-development programs. There are also opportunities to manage demographic shifts as well as regulatory and legislative shocks. Sometimes companies will put money into lobbying efforts to create their own positive regulatory shock. Others can manipulate the legislative process in a way that will open new markets and streamline the regulatory process. Companies subsequently benefit from lower costs.

that they begin to expect recession and deflation rather than expansion and inflation. Master Cyclists keep close track of the movements of the yield curve, thereby creating a powerful forecasting tool that can help direct the timing of well-crafted strategies and tactics. The final tool on which business-cycle forecasting relies is the macroeconomic calendar of economic reports. By watching on a regular basis how the stock, bond, and currency markets react to each new piece of economic news, any would-be Master Cyclist can go a long way toward building both financial market literacy and a... sixth sense about where the economy might be heading, PART XI: THE MASTER CYCLISTS FAVORITE says Navarro. FORECASTING TOOLS Besides the use of these forecasting tools, there is Learning how to forecast the business cycle accurately strategic power by tuning into the patterns of sector rotation. and in a timely manner requires a reliance on three sets of The objective here is to cultivate awareness of the many tools: 1) leading economic indicators 2) forecasting models industry and sector cycles that move in and out of sync 3) macroeconomic calendars of economic reports. These with broader business and stock market cycles. With sector rotation, although most stock prices In the increasingly sophisticated worlds of both supply chain rise during expansionary economic management and management strategy, it is now well understood times and fall in recessionary times; that outsourcing can be a very useful micromanagement tool over different phases of the stock irrespective of movements in the business cycle. market cycle, certain industry sectors may outperform others. Master economic reports might be issued from government agencies Cyclists will see sector rotation patterns and use them for and private institutions on topics such as consumption, strategic and tactical value. production, inflation, and productivity. How a business cycle can be proactively managed relies Leading economic indicators use what is called a yield on a clear understanding of the fluctuating fortunes of most curve to forecast business cycle turning points. The yield companies. As the business cycle moves from bright and curve measures the spread between short- and long-term prosperous expansionary times to difficult recessionary interest rates on Treasury securities. This information can troughs, Master Cyclists use their knowledge to recognize be an accurate signal of both recessionary and expansionary the profound impact on the fortunes and fates of so many changes. businesses. To demonstrate the efficacy of yield curves as excellent Well-timed strategies across the varied business forecasting tools, its important to understand that yield cycle phases are critical for maintaining and achieving curve inversions signal recessions while steep yield curves competitive advantage when dynamic movements indicate expansions. and macroeconomic shocks come into strategic play. It is also useful to understand the logic of the yield Implementing the principles covered in this book will curves forecasting power. Two different entities determine enable any organization to improve its competitive position short-run versus long-run interest rates. Short-run interest and performance. rates are directly determined by the U.S. Federal Reserve, * * * often when concerned about rising inflationary pressures. A chapter-by-chapter summary and a bibliography Federal Reserve hikes depend indirectly on how long-term are provided. bond investors react to these policies, which is generally

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The Well-Timed Strategy

Peter Navarro

Remarks
Hundreds of companies were analyzed for this book, The Well-Timed Strategy, to help modern executive teams strategically manage their companies through both recessionary and expansionary phases of the business cycle and gain competitive advantage. The material in this book is presented in an accessible and entertaining manner. The insights are designed to motivate executive teams and embrace Master Cyclist management that creates value for their firms and a leading competitive edge over rivals. Business executives reading this book will learn to understand the process of cultivating awareness of economic indicators and master the dynamics of the business cycle. Complex interactions such as the range of shocks, policy actions, and errors can cause movements in the business cycle at any given time. In advance praise for this book, Lakshman Achuthan, managing director at the Economic Cycle Research Institute says, this book is a virtual tour de force of strategies and tactics being used by some of the best Master Cyclist business executives in the world. Using a wealth of realworld examples, Navarro clearly explains the dos and donts of timing important executive decisions to the business cycle so much so that after reading this book, youll view the business cycle more as a strategic partner rather than an economic adversary.

The first chapter of this book provides an overview of the concept of Master Cyclist management. Chapters two through ten use various entertaining real-world examples to illustrate the well-timed strategies of business executives. Chapter 11 shows how these business executives can learn to be their own economic forecasters using a fairly simple set of tools and leading economic indicators. Table 11-1 on page 202 provides a list of some of the most important economic reports released each month in the United States. These reports help to build a macroeconomic calendar that simplifies business cycle forecasting. While this table focuses solely on the U.S. market, it is important to be aware of economic reports from other countries around the globe.

Reading Suggestions
Reading Time: 14-15 Hours, 252 Pages in Book A business cycle primer that addresses exactly what a business cycle is and how its movements are measured can be found in Appendix B. Even more importantly, it comments on the many factors causing economic movements through cycles of expansion, recession, and the return to expansion. This appendix can be helpful when read before starting the book. The primer outlines and explains basic concepts, discusses the real Gross Domestic Product, and describes its various measurements. Using relative explanations and examples, readers can benefit from discerning what causes cyclical movements and what triggers recession.

CONTENTS Chapter 1: Strategies and Tactics of the Master Cyclist Executive Chapter 2: Countercycling Your Capital Expenditures Chapter 3: The Acquisitive Master Cyclist Buys Low and Sells High Chapter 4: The Art of Cherry Picking and Other Well-Timed Tactics of the Human Resources Manager Chapter 5: Macromanaging Your Production, Inventory, and Supply Chain Chapter 6: Master Cyclist Marketing Through the Business Cycle Seasons Chapter 7: Pricing the Cycle and Managing Credit and Account Receivables Chapter 8: Proactive Profiting from Oil Price Spikes, Interest Rate Hikes, and Exchange Rate Risks Chapter 9: When You Cant Beat the Business Cycle, Hedge Its Risks! Chapter 10: Surviving and Prospering from the Economic Shocks of War, Terrorism, Drought, and Disease Chapter 11: The Master Cyclists Favorite Forecasting Tools Appendix A: The Master Cyclist Projects Treasure Trove of Data and All-Star Team Appendix B: A Business Cycle Primer

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The Well-Timed Strategy

Peter Navarro

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Business Book Review Vol. 23, No. 32 Copyright 2006 Business Book Review, LLC All Rights Reserved

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