Reports from the Knowledge Labs about our recent findings, research topics, and interviews with lifestyle leaders who are creating their own futures.
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How to stimulate your own powers of foresight. Consider the following thought provokers. Ask yourself, in these categories what are the brand new trends and forces? Which are the ones growing in importance? Which current forces are loosing their steam? Which have peaked or are reversing themselves? Which are the "wildcards" about to disrupt us in the future? POLITICAL AND TECHNICAL thought for food: Electronics, Materials, Energy, Fossil, Nuclear, Alternative, Other, Manufacturing (techniques), Agriculture, Machinery and Equipment, Distribution, Transportation (Urban, Mass, Personal, Surface, Sea, Subsurface, Space), Communication (Printed, Spoken, Interactive, Media), Computers (Information, Knowledge, Storage & Retrieval, Design, Network Resources), Post-Cold War, Third World, Conflict (Local, Regional, Global), Arms Limitation, Undeclared Wars, Terrorism, Nuclear Proliferation, Weapons of Mass Destruction, Governments (More/Less Power and Larger or Smaller Scale), Taxes, Isms: Nationalism, Regionalism, Protectionism, Populism, Cartels, Multinational Corporations, Balance of Trade, Third Party Payments, Regulations (OSHA, etc.) Environmental Impact, U.S. Prestige Abroad. SOCIAL AND ECONOMIC Food for thought:
Labor Movements, Unemployment / Employment Cycles, Recession, Employment Patterns, Work Hours / Schedules, Fringe Benefits, Management Approaches, Accounting Policies, Productivity, Energy Costs, Balance of Payments, Inflation, Taxes, Rates of Real Growth, Distribution of Wealth, Capital Availability and Costs, Reliability of Forecasts, Raw Materials, Availability and Costs, Global versus National Economy, Market versus Planned Economies, Generations: Y, X, Boomers, Elderly, Urban vs. Rural Lifestyles, Affluent vs. Poor, Neighborhoods and Communities, Planned or Organic Growth.
Got Knowledge?
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The Journal of 2020 Foresight
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Friday, August 22, 2003
Springing Into Pagosa for Lifestyle and Community Fit with Trend-setting Neighbors
Chapter Three: The Outpost
By Steve Howard, CKO
The Knowledge Labs
Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories
“On October 14 (1803), (Meriwether) Lewis reached Louisville…. When they (Lewis and Clark) clasped hands on the Louisville waterfront, the historic partnership was actually formed. Eager to be on their way, they apparently had the keelboat piloted through the (Ohio River) Falls the next day and established their base camp as the Clark farm in Clarksville (Indiana). But then, for some reason, perhaps needing to further screen the recruits Lewis and Clark had gathered or perhaps needing to fix damage the keelboat may have sustained in passing through the Falls, they delayed setting off until October 26.”
James J. Holmberg
Journal of 2020 Foresight: Where is he? And how did you put the pieces together to solve the riddle?
Eagle: What was the first set of clues? He’s in a destination that the local Indians called “Healing Water “ for the thermal springs that became a popular spa in the 1800s. He says this place is known for the water that reaches 153 degrees Fahrenheit. It also heats some of the town’s buildings.
Explorer: We also know the location is surrounded by a national forest. The area enjoys abundant recreational activity supported by the melting snow flowing into summer lakes.
J2020F: You were stumped for a while trying to figure out something about “Birds of a Feather,” Father Serra, biting off more than you can chew and Red Ryder.
Explorer: But we remembered the swallows returning to Capistrano – San Juan Capistrano, near Dana Point in California. But Red Ryder doesn’t make sense and the last set of clues stumped us for a while -- “the basic math of howling in the water that runs both ways?”
Eagle: Remember when we discussed gold and silver mining and dividing the shares. Think about it. Where does water run both ways? At the Continental Divide. That’s the basic math.
J2020F; So the destination must be near the Continental Divide in the San Juan National Forest, but where?
Eagle: Well, we reviewed the winter ski resorts and considered the springs – as in Steamboat and Glenwood. But, I’m certain the destination is Pagosa Springs – about 20 miles from Wolf Creek. Let’s check out their descriptions.
J2020F: Or the place where there’d be howling in the waters.
Explorer: Here it is. “Covering 1.9 million acres in southwestern Colorado, lies the San Juan National Forest, with elevations in the forest range from 6,800 feet at Junction Creek to 13,000 feet at Wolf Creek near the Continental Divide, and over 14,000 feet at Mount Wilson in the Lizard Head Wilderness. Two US highways bisect the region -- US 550 cuts through the forest along the north / south, while US 160 divides along the east / west axis. Mountains, canyons, waterfalls and unusual landforms give life to wide variations of vegetation.”
Eagle: And the description for Pagosa Springs: “Surrounded by the San Juan National Forest, Pagosa enjoys abundant recreational activity supported by the melting snow flowing into summer lakes. For ski enthusiasts, a 23 mile trek brings you to Wolf Creek Ski Area on US 160 at the top of aply named Wolf Creek Pass. Year round recreational opportunities satisfy lovers of fishing, hiking, bicycling, rafting, hot air ballooning, skiing, ice-skating and snowmobiling. “
J2020F: But, what about Red Ryder?
Explorer: We’re not finished. Check it out. Fans of "Red Ryder” comic strip and western art enjoy Fred Harman Art Museum.
Eagle: And finally, “Named by local Indians for the thermal springs (Healing Water) Pagosa became a popular spa in the 1800s as well as a lumbering center. Not only known for the 153 degrees Fahrenheit water (which heats some of Pagosa's buildings) but, equally known for large snowfalls in the winter.”
J2020F: And does it make the innovation – growth list?
Eagle: You bet. There it is right there on the Colorado list: Basalt, Pagosa Springs, and Redstone.
Explorer: And, Pagosa Springs claims one of the more trend-setting neighborhoods. That indicates it has the potential to develop into a high appreciation real estate investment.
J2020F: So, you’re saying this little demonstration shows you can determine if a town is attracting people like you. Further, you can tell if the people who live there are ones you'd enjoy as neighbors. From an investment standpoint, you can tell if the town is attracting the trend setting lifestyles of the more affluent. If it is then, the area will enjoy a higher appreciation in real estate.
Explorer: That’s right. And it is very simple to check if you go to the Claritas PRIZM public website.
Eagle: All you need is a zip code. In the early days our original teams began their searches with zip codes supplied by the post office.
J2020F: So, if you plug in Pagosa Springs zip code into the Claritas PRIZM website it will spit out the neighborhood profiles? And then you can search its database for all the towns that match your preferred lifestyle?
Explorer: Yes and No. You can’t search it for free based on one of their profiles, like “New Eco-tobia,” a neighborhood profile in Pagosa Springs and on the trend-setting list identified by Harry Dent, such as:
Blue Blood Estates
Money and Brains
God’s Country
New Eco-tobia
Gray Power
Young Influentials
Eagle: Our trend-setting expedition has been comparing notes with each other and as a result can tell you which places in the West have one or more of those profiles.
Explorer: One reason the teams like the Claritas PRIZM profiles is that it divides them along two dimension, or an x-axis and a y-axis that mirrors to a large degree the matrix of the Do-What-You-Love scenarios. At one extreme along the density axis is Urban (high density) and at the other is Rural (low density). And the second axis, status, is anchored by elite (highest education, home value, occupation, and income) and poorest.
J2020F: OK, how about the first, Blue Blood Estates. From the name, I think I can guess, but where to they fall within the Claritas matrix?
Eagle: Well, they don’t have to live in congested, urban areas, so you find them in the elite suburbs. Statistically, these neighborhoods house a high concentration of the wealthiest in the United States. If you are familiar with southern California – you’d find them in La Jolla, Torrey Pines, and Escondido (San Diego county) and Newport Coast, Newport Beach, Corona del Mar, Huntington Beach, Irvine and Mission Viejo (Orange County).
Explorer: Unless you already live in one of those neighborhoods, it’s unlikely that for the rest of us, we’ll ever afford to call them our neighbors.
J2020F: What about Money & Brains?
Explorer: They’re part of the second most affluent groups of neighborhoods – those that live in more exclusive urban areas. Within the broad social group you expect to find the movers and shakers in entertainment, education, finance and business – executives and professionals running the show. Money and Brains neighborhoods, however, ring around a city on the fringes. You might find them as couples in their mid-50s living in townhomes and shopping at Nordstroms or renewing their passports.
Eagle: In addition to a zip code in Newport Beach and Huntington Beach in Orange County, they inhabit two Coronado neighborhoods in San Diego.
J2020F: I’m guessing you won’t uncover many God’s Country neighborhoods in downtown Los Angeles, right?
Eagle: You’re right. We already identified two towns with this neighborhood cluster living far outside major metropolitan areas– South Austin, Texas and Parker, Colorado. Both areas fit the “Executive Exurban” profile popular for white-collar professionals and managers in the mid-30 to mid-60s age range. They’re affluent, but not quite as wealthy as the Country Squires, also part of this Landed Gentry group.
Explorer: At last count, the expedition has discovered somewhere between 35 and 40 neighborhoods across the West – including Telluride and Copper Mountain, Colorado; and most of the better known ski resorts; Santa Fe, New Mexico, Coeur d'Alene, Idaho, Page, Arizona; and of course, Lake Arrowhead.
J2020F: What about the next neighborhood – the New Eco-tobia?
Explorer: Another popular profile – just under 35 different neighborhoods have been identified in pristine areas of the Rockies and other small towns and remote exurbs. Similar to the Landed Gentry group of neighborhoods, this group, Country Families, to which the New Eco-tobia belongs have escaped the urban lifestyle. They work in industrial and agrarian occupations. They have above-average education and gravitate to high-tech industries in pristine areas of the West.
Eagle: While they fit into the mid-scale affluence category, they’re able to afford more, because their cost of living is lower than their counterparts in urban an suburban areas. You’ll find neighborhoods with these birds of a feather in Telluride, Estes Park, and the Springs – Steamboat, Glenwood, and Pagosa – all in Colorado.
J2020F: What about the next to last affluent profile, Gray Power. I’m assuming this is an older lifestyle with the financial wherewithal to live where they want, right?
Explorer: That’s right. They populate the Sunbelt Cities – like Palm Springs and Palm Desert in California. They’re moving into the 55+ gated communities with country club privileges. They favor smaller scale second or satellite cities rather than the suburbs of major metropolitan areas.
Eagle: This is probably the third most frequent profile uncovered in better towns – roughly 32 towns throughout the Western United States have been uncovered, including many of those already mentioned.
J2020F: So, that leaves us with Young Influentials, what the opposite of Gray Power?
Eagle: Well, both might attend a Rolling Stones rock concert. But, this cluster falls within the 25 to 44 year old age range with both singles and couples. Instead of living in second tier satellite cities, Young Influentials belong to the upper-middle income category found most in the suburbs of major metropolitan areas. They enjoy their dual incomes from managerial and professional jobs while choosing not to have children if married.
Explorer: In southern California, you see clusters of these neighborhoods along the gold coast from San Diego to Orange County – in San Clemente, Capistrano, Torrey Pines, Pacific Beach, Newport Beach, and Laguna Beach among others.
J2020F: What if I know the geographical region I want to invest in -- say Colorado -- is there a way to evaluate the risk and return along Dent's growth curve?
Got Knowledge?
Copyright ©2002 - 2006 Aarnaes Howard Associates. All rights reserved worldwide.
7:36 AM
Monday, August 18, 2003
Out of Dana Point, Parker and Austin with Doc Holliday and the Flying Norseman
Chapter Three: The Outpost
By Steve Howard, CKO
The Knowledge Labs
Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories
“(Meriwether) Lewis arrived in Pittsburgh on July 15th (1803). Over the next six weeks, he by turn pleaded with and threatened a local boat builder to construct the keelboat. Finally, on August 31, he set off down the Ohio (River) for his meeting with (William) Clark. If getting the keelboat built had been frustrating for the young explorer, actually sailing down the Ohio was perhaps even more so. The upper reaches of the river were lower than anyone could remember them being. The keelboat had to actually be dragged downstream in some stretches.”
James J. Holmberg
Journal of 2020 Foresight: Let’s recap a little bit. Last time we talked about “Doing What You Love” scenarios by taking advantage of “Birds of a Feather” (BOF), the working title for the knowledge base construction. And you figured out how to get around the use of the knowledge base to locate Grey Owl without “cheating” by demonstrating how it worked.
You said he could be almost anywhere in the world -- with the tropical resort team, or with “It’s Wired, Do What You Love Anywhere” team or the innovation-growth team, or the Idaho team, or the New Eco-topia team, or the 34 to 45 Age Group team, or the Elite Suburb team, or the Country Squires team, or the ….
Explorer: In fact, the last time we discovered his whereabouts it was in a destination high on the list of both the tropical resort team and the innovation-growth stage teams, remember?
Eagle: Oh, yeah. I’ve got the final clue here – the post card from somewhere in the Caribbean, here it is from the Turks and Caicos Islands.
J2020F: Back to the demonstration at hand. You said you’ve also discovered that you can track the BOF migration in 6 degrees or less to almost anywhere from Dana Point. And, I wanted you to “Kevin Bacon-ize,” as you call it, to find high real estate appreciation (innovation-growth) locations with Austin and Dana Point neighborhood profiles, right?
Eagle: Right, a list of higher risk, yet higher appreciation investment areas that would appeal to life-style profiles currently living in Austin and Dana Point.
Explorer: Let’s begin with the Austin neighborhood profiles. And, then we’ll compare them with the Dana Point profiles and see where we match.
Eagle: OK, for Austin we have profiles for South Austin, Austin in general, and for a suburb between south of Round Rock, midway between Leander and Austin. The first lifestyle neighborhood profile equates to what we’re calling our elite exurban families with average incomes of $65K, and with an age distribution between the mid-30s to mid-60s.
J2020F: Can you tell which expedition teams contributed the data?
Explorer: Well, it pops up on several lists – The Colorado expedition, the Ages 35 to 45 and 45 to 64 expeditions – these are the knowledge worker profiles -- well-educated executives, professionals, and technical white-collar workers. They have been called the “landed gentry” profiles by one demographic marketing company, Claritas. They prefer to live away from the city. Most families have more than one income. So, they’re affluent and enjoy spending money on an active, outdoor recreational lifestyle, and on remodeling their homes – or at least reading about it or watching the cable channels devoted to the homeowner.
Eagle: It looks like, if this fits a description of you, by applying our birds of a feather migration model, you’d be happy by moving to similar neighborhoods in Mammoth Lakes, Lake Arrowhead, and Lake Tahoe in California; Parker and Estes Park in Colorado; Santa Fe, New Mexico; Coeur d'Alene, Idaho; and Maui, Hawaii.
J2020F: Any similarities with Dana Point and the innovation appreciation growth profiles?
Eagle: Hmm. Looks like a couple of BOF migration paths take us there. The first is from Parker, Colorado to Lake Arrowhead, California that overlaps with the neighborhoods between Leander and Austin, Texas.
Explorer: This neighborhood profile came from the same two Age expeditions – 35 to 44 and 45 to 64 and the California expedition. With almost identical household income as the first lifestyle, the main difference is this shows up in the suburbs, because it is the married with children lifestyle. It is also one of 5 very affluent lifestyles living in the better suburb neighborhoods.
J2020F: So, I’d be happy in Lake Arrowhead, and of course in Parker, Colorado and Austin, Texas – where else?
Eagle: In California -- Mission Viejo, Lake Forest, and Irvine (south Orange County), Carlsbad and Encinitas (along the coast of north San Diego County) and San Marcos and Escondido (San Diego County exurbs); and Reno, Nevada.
Explorer: Notice he didn’t mention Dana Point yet, or the solution to Grey Owl’s riddle.
J2020F: And, I’m not certain which of these destinations qualify as an innovation-growth resort investment?
Eagle: Hey, I just got started. We’ve got another upscale profile – an empty nest lifestyle that makes the connection. Like the first two profiles, they remain current with newer technologies – all three profiles are likely to bank online. While also an affluent professional and management couple, these households bring home slightly less income – roughly $ 50,000.
Explorer: These recently childless couples show up on the mid-life and empty nest expeditions. In California you can find them in neighborhoods stretching along the ocean from Dana Point, to Laguna Beach, to Newport Beach and to Huntington Beach. They also pop up in the San Diego exurbs – San Marcos and Escondido.
J2020F: What can you tell me about the Lake Arrowhead area? Isn’t that the Kevin Bacon connection you found between Austin and Dana Point?
Explorer: Lake Arrowhead shows up on both the California expedition’s list and the mountain resort lists overlapping with Utah, California, Colorado, Nevada and New Mexico.
Eagle: Here you go. It’s located in San Bernardino County in California. San Bernardino was settled by Mormons in the 1850s in what is now the largest county in the United States. It’s a gateway to the San Bernardino Mountain resorts of Lake Arrowhead, Big Bear Lake and Running Springs. Strict zoning laws have protected the appearance of Lake Arrowhead, a popular mountain resort town and a highlight of the scenic Rim of the World Drive. Fishing and boating on the lake are popular recreation pursuits, as well as winter recreation activities in nearby San Bernardino National Forest.
Explorer: When you search on San Bernardino National Forest, you find, "The forest encompasses the highest mountains in Southern California, including 11,502-foot Mount San Gorgonio. Some 114,000 acres are set aside as the Cucamonga, San Gorgonio, Santa Rosa and San Jacinto wilderness areas. In addition to the resort centers of Lake Arrowhead, Big Bear Lake and Idyllwild, there are campgrounds, picnic areas and six winter sports areas. Other recreational opportunities include hiking, skiing, horseback riding, fishing and hunting."
J2020F: Hold on. Did you say “Running Springs”? Now you’ve got me going. Do you think that might be where Grey Owl is? Wasn’t it some kind of springs? I know we ruled out Mammoth Lakes.
Eagle: Let’s check it out. Hmm. It’s got 5 neighborhood lifestyles that look promising. The first one is the same one we first discussed that connects Parker, Colorado with Austin and Lake Arrowhead. It shares the neighborhood profile with another famous springs – Steamboat Springs in Colorado, as well. Look, there are connections to some of the better Colorado ski resorts – Breckenridge, Snowmass and Beaver Creek. In Utah, look what pops up – Park City and Deer Valley. Even Sun Valley in Idaho and Incline Village in Nevada.
Explorer: Look at that. The second Austin profile connects Mammoth Lakes ski resort area with Running Springs, Incline Village, South Lake Tahoe, and Temecula (San Diego exurb) with several resorts in the Hawaiian Islands and Reno.
J2020F; You said 5 neighborhood lifestyles.
Eagle: Ah. Jackpot. This next profile connects to over 30 destinations. In terms of affluence, the household income equates to the empty nest profile, but unlike it, this one still has kids at home and is more likely to live in rural settings. What’s interesting, according to the expedition teams, is that because rural cost of living is less than the urban and suburban neighborhoods, it’s spending power rivals those with higher income households saddled with higher living costs.
Explorer: In the Claritas marketing database, isn’t this one of four lifestyle clusters making up the country group?
Eagle: Right. They’re found in more remote towns and exurbs. One of the other four country lifestyles described in the Claritas database, New Eco-topia also appears on the real estate investment expedition’s list.
J2020F: Does it show up as a neighborhood in Running Springs?
Eagle: No, but it does in neighboring Big Bear, and in Telluride and Durango, Colorado. It also gives us a few more springs, but they’re all in Colorado: Pagosa Springs, Steamboat Springs (already identified) and Glenwood Springs.
Explorer: The remaining Running Springs profiles fall within the Claritas “Rustic Living clusters. These neighborhood lifestyles enjoy a low cost of living, but they all have lower-middle household incomes earned as craftsmen and laborers in agriculture, mining, transportation and construction." Like Running Springs, neighborhoods attracting birds of a feather fitting these profiles can be found along the coasts, deserts and lake shores.
J2020F: Is a pattern beginning to emerge?
Eagle: Well, the other springs show up – Pagosa Springs, Steamboat Springs, and Glenwood Springs. And, we pick up Sedona, Arizona, and Las Cruces, Taos and Santa Fe in New Mexico.
Explorer: Hold on. The last Running Springs profile includes the three springs, Telluride and Sedona again.
J2020F: Do any of these ring a bell with the last set of clues -- “the basic math of howling in the water that runs both ways?”
Eagle: Let’s try Steamboat Springs. Look’s like, according to both the Colorado team and the mountain resort expedition teams, that the population grew about 3000 between 1999 and 2002 – from 6700 to 9800. The story told is James Crawford settled in the Yampa River Valley in 1874 in a cabin on the west bank of Soda Creek. The chugging of the hot spring near the river which shot mineral water 15 feet in the air sounded like a steam boat.
Explorer: And, some of those thermal waters heat hot mineral baths at the public pool. Known for skiing and ski jumping, thanks to the Flying Norseman – Norwegian Carl Howelsen since 1913, Steamboat became internationally known in the 1930s.
J2020F: I guess we can’t rule it out, right? How about Glenwood Springs?
Eagle: During the same time frame, Glenwood Springs has grown less dramatically – from 6,600 to 7,736, but it too has been known for it hot mineral springs.
Explorer: The Ute Indians enjoyed the mineral springs and natural vapor caves. So did the affluent neighbors who made their money from Colorado mining boom, who came by special train to pamper themselves in Glenwood Springs’ fashionable spa.
J2020F: Isn’t it also famous for the grave of Doc Holliday close by in Linwood Cemetery?
Eagle: Talking about colorful, nearby you’ll find Spouting Rock Creek, and Hanging Lake in Dead Horse Gulch.
Explorer: But do the math. I don’t think these two places add up as Grey Owl’s destination.
J2020F: Well, if I stepped into those springs, I think you’d find me howling. What’s left? It seems like Colorado has an abundance of both hot springs and ski resorts.
Explorer: Well, the Colorado expedition lists Aspen, Beaver Creek, Breckenridge, Purgatory, Silver Creek, Snowmass, Steamboat, Telluride, Vail, Winter Park and Wolf Creek.
Eagle: That’s it.
J2020F: What’s what?
Explorer: He thinks he knows where Grey Owl is.
Eagle: And, not only that, I believe he’s staying in one of the better real estate investment opportunities if you’re willing to take a risk for maximum appreciation.
Got Knowledge?
Copyright ©2002 - 2006 Aarnaes Howard Associates. All rights reserved worldwide.
6:37 AM
Wednesday, August 13, 2003
Degrees of Kevin Bacon, Or Doing What You Love with Other Birds of a Feather
Chapter Three: The Outpost
By Steve Howard, CKO
The Knowledge Labs
Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories
“From March to June 1803 (Meriwether) Lewis spent time at the U.S. arsenal in Harper’s Ferry, Lancaster, and Philadelphia in securing arms, overseeing the design and construction of an experimental iron frame boat he dubbed ‘The Experiment,’ being tutored by the leading men of science and medicine of the day, and procuring supplies. Upon his return to Washington in June, Lewis invited his friend and former commanding officer, William Clark, to join him as an equal partner in the undertaking. After wrapping up his affairs, Lewis left Washington for Pittsburgh on July 5. He would not return to the capital city for three and one-half years.”
James J. Holmberg
Journal of 2020 Foresight: Both of you told me the initial learning expeditions began with Harry Dent’s list. The one that attracts individuals and businesses yearning for open, innovative, social and professional climates – the nine new growth areas in real estate. And, how the knowledge base can plot migration paths from one neighborhood to another throughout the West and to some resort islands.
Explorer: Grey Owl synthesized the first phase of the knowledge base from multiple expeditions – roughly a dozen. The working title of the experiment was “Doing What You Love with Birds of a Feather.”
Eagle: Speaking of which, couldn’t we use it to find out where Grey Owl is? We figured out swallows and Father Serra meant San Juan Capistrano, and we realized San Juan was the name of the National Forest …
J2020F: What do you mean?
Explorer: He means cheating. You see, the knowledge base is our choice of LAST resort. When we can’t put all of the clues together to come up with our destination answer. We know that he’s somewhere in the world with one or more expedition team members. He could be with the tropical resort team, or with “It’s Wired, Do What You Love Anywhere” team or the innovation-growth team, or the Idaho team, or the new eco-topia team, or the 34 to 45 Age Group team, or the elite suburb team, or the country squires team, or the ….
Eagle: In three clicks, we could probably use the clues to search the experience and research generated by the teams following Dent’s initial list and come up with the answer.
J2020F: You keep mentioning Dent’s list. What is it?
Eagle: Harry Dent’s brilliant. He researched a lot of the best places to consider for a lifestyle change, a real estate investment, and or an entrepreneurial venture.
Explorer: In priority order, from best to least, for finding all three in one place, he lists:
Resort Towns
Small College and University Towns
Classic Towns
Revitalized Factory Towns
Exurbs
Suburban Villages
Emerging New Cities
Large-Growth Cities
Urban Villages
J2020F: So what this means, is the knowledge base grows as members of learning expeditions explore the places which represent the best fit for their preferences?
Explorer: And make good on their commitment to make it better than it was when they began to use it.
Eagle: In the discovery phase, we’re more interested in connecting people together who share the same kinds of interests and preferences with each other, than we are building a sophisticated database. That will come later.
J2020F: Let me see if I get this right. This is more like mining knowledge, but using the rules of thumb, tools and resources that the miners themselves use instead relying on a sophisticated computer program?
Explorer: In a way. The knowledge nuggets each of the miners discovers are theirs. Unlike gold or silver mining in the California gold rush or in the Colorado towns, knowledge doesn’t lose its value when it is given away or divided into shares.
Eagle: Did you say divided into shares? Read back Grey Owl’s second set of clues.
Explorer: You mean something about “the basic math of howling in the water that runs both ways?”
Eagle: Basic math might refer to adding, subtracting, multiplying or dividing.
J2020F: Can we stay on track? So, you’ve been saying the purpose behind the knowledge base is to build a network of knowledge nomads? Can you explain how it works?
Eagle: Learning expeditions examine whether or not a new town or area fits -- the birds of a feather feature. You can determine if a town is attracting people like you. You can tell if the people who live there are ones you'd enjoy as neighbors. As they gather information to make their own decisions, they share what they learn with each other.
Explorer: As current and future expedition members investigate features about an area, using the knowledge base saves them time. Because of its community of tribes feature – the network of people – it also speeds up the process of making contacts and getting introductions.
J2020F: From an investment standpoint, how can you tell if the town will enjoy a higher appreciation in real estate?
Eagle: You’d have to find out if it is attracting the trend setting lifestyles of the more affluent. If it is then, the area fits your criteria. And, the good news is Grey Owl has synthesized a lot of intelligence gathering from several expeditions to help you decide.
Explorer: And, you’d want to examine your appetite for risk with the highest potential for appreciation – selecting a town in the innovation growth stage vs. an investment in a less risky, but with less appreciation potential that might be found in an emerging new city or late growth city.
J2020F: And you’re saying Grey Owl’s knowledge base helps you with your decision? Give me an example.
Explorer: Let’s see. How about one that demonstrates how the birds of a feather phenomenon cuts across several learning expeditions – each with their own shared objectives – and when synthesized yields better knowledge useful to the whole community?
J2020F: You can do that?
Eagle: Sure.
Explorer: Careful. He’s bending the rules.
J2020F: What do you mean?
Explorer: He’s just found a legitimate way to solve the riddle by answering your question.
Eagle: So?
Explorer: So, let’s see you pull this one off. You’re about to see the famous “6 Degrees of Kevin Bacon” in action!
J2020F: You mean how you can find a connection between any two famous celebrities through their direct and indirect association with a Kevin Bacon movie? As in, his commercial on T.V.?
Explorer: Yup, the statistical data has been around for years. The basic observation is that anyone can be introduced to any other person simply by asking a circle of friends. Time and time again introductions to that person can be arranged by referral in six or fewer contacts.
J2020F: So, the first degree represents your first request to a friend or relative, for instance. They refer you to a most likely contact within their circle of associates – the second degree. And that referral connects you to a third degree of probable gate-keepers, and so on?
Explorer: That’s right.
Eagle: Give me something to start with. What to you want to find? And I’ll ask some questions that will help me tap into some of the on-going expeditions so we can find the answer.
J2020F: OK. How about if I’m interested in investing in a place with high appreciation and it would have to appeal to someone living in neighborhoods in say, Dana Point or San Juan Capistrano – where you launched your original learning expedition – and say someplace else like Austin, Texas.
Eagle: Good. Now, what I’m going to do is take advantage of the past learning already in the knowledge base generated by teams investigating the top of Dent’s list – the resort towns, but at the innovation phase. Just let me fire up my laptop, here. And, you said, what else?
J2020F: Dana Point and San Juan Capistrano on the coast in south Orange County, remember?
Eagle: Right and also we want to dip into the “Birds of a Feather” (BOF) in Austin – right? Do you want to narrow it down? Where in Austin?
J2020F: OK, what’s Austin famous for? How about Dell computers? Let’s do that. Take a look at BOFs on the outskirts of Austin somewhere south of Round Rock, maybe midway between Leander and Austin. What do you show there?
Eagle: How about what looks like the Wells Branch area on the map?
J2020F: Perfect.
Eagle: Let’s see. I don’t think we’ve tried to Kevin Bacon-ize these areas before. But, here goes. “Trust the process, Luke.”
Explorer: Some times he gets overly dramatic. I can tell you from our experience that you played right into his hand. We’ve discovered we can track the BOF migration in 6 degrees or less to almost anywhere from Dana Point.
Eagle: Oh, great. Go ahead and steal my thunder!
Explorer: But, I’m not so certain he can solve Grey Owl’s riddle as well. This should be fun.
Got Knowledge?
Copyright ©2002 - 2006 Aarnaes Howard Associates. All rights reserved worldwide.
8:23 AM
Thursday, August 07, 2003
Search for the New American Dream: Where in the World is Grey Owl?
Chapter Three: The Outpost
By Steve Howard, CKO
The Knowledge Labs
Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories
"After being galvanized to action by (Alexander) McKenzie, the president (Thomas Jefferson) put in motion the training of (Meriwether) Lewis in the scientific and medical arts of the day and made a January 1803 request to Congress to provide $2,500 for the expedition. The total bill for the journey actually was almost $40,000, but the benefits realized by the United States were many times greater."
James J. Holmberg
Journal of 2020 Foresight: While I had postponed it for as long as I could, I broke down and made contact with the real world. I promised I'd email the lion's share of my interviews to my editor, so I ran up quite a bill at the hotel's Internet cafe. For our last night in town, Explorer, Lone Eagle, and I walked up a dirt lined street and a short hill to the pink restaurant, Casa Rafael's, between the Hotel Hacienda and Marina Sol.
Explorer: Ah, this is the life, isn't it? It's real easy to fall in love with a tropical resort. Once your bio- rhythms synchronize with the pace of life and the prevailing trade winds, you can see why resorts top the list of nine types of places to invest in, can't you?
Eagle: Nice set-up for our surprise.
J2020F: What, a surprise appearance by Grey Owl?
Eagle: Not unless this is what the local Indians called "Healing Water" for the thermal springs that became a popular spa in the 1800s.
Explorer: So you received another email riddle?
J2020F: What are you talking about?
Explorer: Grey Owl's on the road. He visits as many of current and past expedition members as he can. We never know where his path will take him until we figure out all the clues he transmits. Anything else?
Eagle: Healing Water, healing water? Where in the world are there communities with geothermal springs? He says this place is known for the water that reaches 153 degrees Fahrenheit. It also heats some of the town's buildings.
J2020F: Well, when I spent time at Mammoth Lakes in the Eastern Sierras with Trailblazer and you could smell the sulfur odor on some of the ski runs, but I don?t think the hot springs outside of town match his description.
Explorer: What else?
Eagle: The location is surrounded by a national forest. The area enjoys abundant recreational activity supported by the melting snow flowing into summer lakes.
J2020F: Well, that could be almost anywhere, right. Any other clues about which one?
Eagle: Something about "Birds of a Feather," Father Serra, biting off more than you can chew and Red Ryder.
Explorer: Hmm. We may lose some points, but I?ll have to wait for the next set of clues.
J2020F: If not Grey Owl, then what?
Eagle: Oh, yeah. The surprise.
Explorer: Well, you weathered the interviews with David and Johnny over at the Pueblo Bonito Pacific Resort. We wanted to introduce you to our friends and hosts
J2020F: We met Rafael Arraut's wife and brother. I had heard rumors that the owners came to visit Cabo San Lucas some time in the 1980s and never left. They opened the restaurant in the early '90s. Rafael's brother mentioned the same 15-year period David did earlier, but when I asked him what he'd do after Cabo became too developed for his tastes, he said, "Move to Cuba."
Explorer: When it comes to resort areas, these guys like to get in at the innovation or early growth breakout stage.
J2020F: Rafael's brother regaled us with fishing stories on pristine beaches and ultra friendly people. It turns out his family is from Cuba, and that may be why, in addition to the six course meal, they offered Cuban cigars.
Eagle: Rafael told me on one of our earlier trips that they had grown tired of Hawaii, where they had run a restaurant for years.
J2020F: When we finished, Rafael's wife suggested we take the taxi, instead of walking down the hill above Medano Beach to the Marina and Sancho Panza for Jazz entertainment. There I summarized my interviews with David and John conducted initially in the Pueblo Bonita's lobby. I met David and John, who wanted to be called Johnny.
Explorer: Johnny's story sounded similar -- the golf and fishing drew him originally from Boston.
Eagle: You see a lot of midlife transitions -- a divorce with kids living with their mothers or a split from an empty nest. But, after a while of living in the Cabo fast lane, they settle down a little and find a line of business to fill some of the hours in the day.
J2020F: David said he came down from Toronto a few years ago and stayed. He bought a place next door to the resort, which will overlook a planned golf course. He told me that he and a partner had figured out and patented a bridge repair process that took off and allowed him to partially retire. He purchased 4 or 5 timeshares, including one of the two sister resorts.
Eagle: Did they take you on a tour?
J2020F: Sure did. David showed me how they built the place so no room will be blocked from the gorgeous Pacific Ocean and beach view -- although the surf is rough and no one can swim at their beach. But the meandering blue tiled pool with swim-up bar more than compensates for sacrifice. The rooms with luxurious tile and top of the line furnishings and expansive patios speak to their affluent market.
Explorer: So Johnny from Boston and David from Canada -- two refugees from the cold weather, what my retired parents in Florida used to call "snowbirds," migrated to Cabo.
Eagle: You can see the pattern begin to materialize. Mobility is a key factor that defines a neighborhood, since life stage changes often cause people to move. Those two birds of a feather move into a new neighborhood, while leaving behind an ex-wife with echo-boom kids in the former neighborhood.
J2020F: Life stage changes like what?
Eagle: The major ones. Like:
Leaving the nest,
Graduating from college,
Getting married,
Having children,
Being promoted,
Emptying the nest, and
Retiring.
Explorer: Don't forget, people will also move when their neighborhood no longer provides a good match in terms of affordability and needs.
J2020F: Now what about some positive event, like when relocating due to a job transfer?
Explorer: Just like those swallows that always come back to San Juan Capistrano, people usually find a neighborhood that is very much like the one they just left.
Eagle: Hold on, what did you just say?
Explorer: Which part?
Eagle: About the swallows and San Juan Capistrano. I think I know the name of Grey Owl's national forest.
J2020F: Isn't San Juan Capistrano near Dana Point in California -- where you all told me your core founding story around the beach bonfire?
Eagle: Of course. Father Serra. That's the place with several historic adobe buildings. Remember the restored 1895 Santa Fe Railroad station that is now an Amtrak terminal and restaurant? We ate there. The Mission San Juan Capistrano was founded in 1776 by Father Junipero Serra, right?
Explorer: Oh, yeah. I remember the waiter told us the mission is famous for the swallows that arrive in mid-March and leave in mid-October.
Eagle: Right. It's amazing. These remarkably constant birds fly approximately 6,000 miles from Goya, Argentina to nest and rear their young in San Juan Capistrano.
J2020F: So, what's the national forest's name?
Eagle: San Juan National Forest!
Explorer: I get it. Biting off more than you can chew -- hard to swallow. "Birds of a Feather," Father Serra -- I get the San Juan, but Red Ryder?
Eagle: We're close. Real close.
J2020F: And, the point to all of this is, what?
Explorer: People with similar cultural backgrounds, needs, and perspectives naturally gravitate toward each other.
Eagle: People choose to live in neighborhoods that offer affordable advantages and compatible lifestyles.
J2020F: And?
Explorer: And, with a little research and intelligence gathering you can use this information to your advantage.
J2020F: How so?
Eagle: If you are a marketing professional, you identify and locate customer targets.
J2020F: Is that because the characteristics that define a neighborhood change slowly.
Explorer: Right, the stability of a neighborhood comes from its fixed features: location, housing, transportation, schools, places of worship, and employment.
Eagle: Self-organization and self-perpetuation also figure into the stability of a neighborhood.
J2020F: So you can take advantage of the predictable nature of neighborhoods?
Explorer: Several marketing and demographic firms offer statistics on specific clusters of neighborhoods grouped into their similar demographic and behavioral characteristics.
J2020F: O.K. Let's see. You're saying with the self-organizing and self-perpetuating dynamics working, new neighbors will very likely resemble the old neighbors when they first arrive, because an unchanged neighborhood attracts similar types of people. Like Cabo San Lucas attracted David and Johnny from the cold North?
Eagle: Correct. But, specific events can significantly change the characteristics of a neighborhood, though. Like what might be occurring in David and Johnny's old neighborhoods.
Explorer: Right. Or as in my case, these can include:
New construction in or around the neighborhood,
Major regional economic adjustments,
Transition from households with children to ones that are empty nests,
Rezoning, and
Dramatically rising/falling land values.
J2020F: So, the neighborhood goes through life stages -- innovation, early growth, late growth, maturity, decline and renewal.
Eagle: That's right. But, remember neighborhoods progress through those stages over periods of years. So, neighborhoods are both stable and reliable as a key to consumer predictability because people need to feel as though they belong.
Explorer: And, neighborhoods have an image and attract certain types of people.
J2020F: So the result is shared behavior patterns -- the self-perpetuating pattern of "keeping up with the Joneses."
Explorer: You got it!
J2020F: So, going back to the positive reason for leaving one neighborhood and finding another because of a job transfer or promotion, what are the things most people look for in a new neighborhood?
Eagle: Well, that depends of preferences, but in general things like zoning laws, the job pool, housing stock, transportation networks, commercial infrastructure, public and private schools, and land values.
Explorer: Other factors, like economic opportunities, race and ethnicity, local politics, language, culture, ambiance.
J2020F: You mentioned those marketing databases. How do they categorize neighborhoods?
Explorer: They focus on a half a dozen factors, roughly. Like social rank (income, employment, and educational attainment), household composition (age, gender, and family structure) and mobility (length of residence).
Eagle: Don't forget ethnicity (race, foreign birth, ancestry, and language) urbanization (variations in urban, suburban, and rural populations and densities) and housing (own, rent, value, age, number of housing units).
J2020F: Now, this is all well and good, but I'm not a marketing professional. What can I do with all this information?
Explorer: If you're looking for the new American Dream and are willing to share what you discover along the way, you could join one of Grey Owl's 10 expeditions.
Eagle: That's right. They're building a shared knowledge base, available to anyone who wants to contribute to it.
J2020F: A shared knowledge base?
Eagle: The learning expeditions represent the discovery phase. So, they're sketching the rough outlines and patterns of knowledge useful to anyone else wanting to apply what the expedition already learned to their own personal quest.
Explorer: But, in return they have to find ways to make the shared knowledge base and the emerging expedition community better than it was when they joined.
J2020F: And, is this what you referred to at dinner -- a shared knowledge base about resorts topping the list of 9 types of real estate investments?
Explorer: Yes. The initial learning expeditions began with Harry Dent's list. The one that attracts individuals and businesses yearning for open, innovative, social and professional climates -- the nine new growth areas in real estate.
Eagle: If you're interested, we'll go into the expeditions in more detail, describing how the knowledge base can plot migration paths from one neighborhood to another throughout the West and to some resort islands.
Got Knowledge?
Copyright ©2002 - 2006 Aarnaes Howard Associates. All rights reserved worldwide.
7:48 AM
Wednesday, August 06, 2003
All In The Family: Where the Rainbow Hits the Road
Chapter Three: The Outpost
By Steve Howard, CKO
The Knowledge Labs
Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories
"In 1802, Jefferson had read Alexander Mackenzie's published account of his journey across Canada to the Pacific in 1792-1793. In his conclusion to the book, the Scotsman urged the British government to seize control of the Oregon Country in order to dominate the lucrative fur industry of the region and trade with the Orient. Jefferson was an Anglophobe, and the possibility that a rival and potential enemy would control this country and its trade, caused him such consternation that he moved from wishing to doing concerning an American expedition across the continent."
James J. Holmberg
Journal of 2020 Foresight: I had a lot to think about. I'd be committing to a timeshare investment covering the timeframe between 2004 and 2034. I recalled my conversation with the groom's neighbor when he asked where we were staying and when we told him, he said, "Oh, yes. The whale in the pool."
After our champagne glasses were filled, he answered my question about his timeshare by telling me he picked up two from the county of San Bernardino.
He paid $1,000 in a tax sale for timeshares in Palm Desert, California. "We've never stayed there," he said. "They only pay a yearly maintenance fee and an association-trading fee to go to wherever is listed." Explorer interrupted my thought pattern.
Explorer: You asked us how our scenarios turned out and if we updated them. I'd have to say we believed the future we co-designed would unfold faster.
Eagle: I've always been five years ahead of the market. I'm afflicted with the ability to visualize how trends unfold. So, when I see where we're all headed I want it to happen in 2004 instead of in 2009 when the mass market materializes.
J2020F: So it sounds like in hindsight, you've adjusted your plans based upon Joel Barker and Harry Dent's s-curve models?
Eagle: Now I'm bucketing key indicators into Dent?s Innovation, Growth, and Maturity percentiles.
J2020F: Do you mean you track indicators as forces move from .1% to 9%, then from 10% breakout to 25% and from 50% to 75%, and then to 90%?
Explorer: We do, but it's not an exact science. It's more of an art form. But, we're using his innovation, early growth, mid-growth, and late-growth, early maturity classifications in new ways.
Eagle: You've already covered technology diffusion lifecycles and the stages of an organization's lifespan using his categories. Now we're subscribing to his migration growth rates to select the best opportunities for lucrative jobs, entrepreneurial ventures and real changes in lifestyles.
J2020F: If I follow you, you're using the s-curve turning point percentages for the third set of options --managing a portfolio of tangible and intangible assets to produce income for a lifetime?
Explorer: Yes. Back when we crafted the original four scenarios, I felt content to do what I loved in my same geographical region. Now, I?m witnessing classical late maturity indicators -- my resort suburb comes with a higher cost of living, more real estate development, growing traffic congestion and a growing number of less healthful smog days.
On top of that, as the weeks and months go by more and more employers downsize their operations locally. As part of cost cutting programs in reaction to the state's business climate and their industry consolidation forces, they're moving to other more economical geographic locations.
J2020F: So, as the once stellar quality of life tarnishes, you're taking the time to find the next best place in which to live and invest?
Eagle: Well, for me, Dent said it best, "The business, career, and, especially the real-estate opportunities are likely to be much stronger in the best boomtowns and cities."
Explorer: We find, more and more of the expeditions in Basecamp focus on a making a major lifestyle change. A lot of people are fed up. A lot of people feel trapped and permanently temporary. A lot of people hate what they're jobs have become and long for something else.
Eagle: While the numbers we've tracked so far describe baby boomers at a crossroads in their lives, we find others aren't waiting to make the same kinds of decisions -- parents with a new family in their early twenties, for instance.
J2020F: By numbers, you mean the top 10 out of 100 predictions and trends?
Eagle: That's right. Boomers, together with their children and grandchildren in some cases, and their parents represent the social and demographic agenda for decades to come.
J2020F: It's all in the family -- the blended, extended family.
Explorer: So this is a great time to sit down with your spouse, extended family, relatives or friends and really consider where you would want to live.
Eagle: Then assess how the next 5 or 6-year boom can open up your opportunities -- before it's too late -- not just for lucrative jobs or entrepreneurial ventures, but for a real change in lifestyle. How will technology allow us to live in a place we might not have considered?
J2020F: With that new sense of urgency, you mentioned earlier, right?
Explorer: Of course,
Eagle: In the Outpost we build on the decisions and insights gained in the previous two locations.
J2020F: What do you mean?
Explorer: In Basecamp Pathfinder helps us to assess our past, present, and future -- lessons we've learned in hindsight, together with our aspirations for a better, more enjoyable future.
J2020F: So for example, Dent's prediction of the great population shift, as a result of the new American Dream?
Explorer: He defines it as earning big-city incomes, but living in small towns. We've already discussed how as this migration trend picks up it will drive a decade-long real estate boom in customized-lifestyle communities.
J2020F: So, we should do what? Invest in locations at various growth stages of S-curve growth?
Explorer: Or at least consider opportunities never available to us before.
J2020F: So, we don't have to be trapped in the same old grind?
Explorer: Dent predicts that working at a distance from centralized corporate offices will become an increasingly -- popular alternative for all kinds of business people, not just for the writers, consultants, salespeople, and entrepreneurs who enjoy this freedom now."
Eagle: At the Ridge, Trailblazer helps us assess the 11 options we might consider by helping us anticipate how external forces will likely play out -- either to accelerate or hinder the progress along a chosen path.
J2020F: So, in the Outpost you implement your plans and decisions? Can you give me an example?
Eagle: Sure. Pathfinder helps us surface what's important to us in our life. From the spiritual and personal side, we reflect on what's important to us at our particular lifecycle. We consider our current situation in terms of
Family,
Friends,
Fitness,
Health,
Hobbies,
Recreation,
Education,
Investments, and
Generational issues and challenges.
Explorer: In addition to what's important to your personal life, he has us examine our Values -- what we want in terms of our private life in our Neighborhood and Communities: our life as
Consumers, as members in
Clubs,
Organizations, and
Volunteer organizations
J2020F: Right. And the chosen path, one of the 11 options, has to satisfy your personal and professional aspirations? The chosen path has lifestyle implications, then, right?
Explorer: Yes, that's correct. We believe more of us will be able to earn big city incomes by doing-what-we-love with birds-of-a-feather in higher quality-of-life communities.
Eagle: What we'll spend more time on here are the second and third set of options:
Work for self -- Start a business, buy a business, buy a franchise. Develop a consulting practice or pursue a portfolio career; and
Maximize tangible and intangible assets to buy independence and free time, volunteer, or live off investments and freelance to supplement income.
J2020F: So, this is where the rainbow hits the road?
Explorer: It's where all the puzzle pieces come together to form a pattern, and then a strategy. With some preliminary research and intelligence gathering, the expedition moves forward on the best path towards their destination.
Eagle: The half of dozen puzzle pieces -- for a big city cash flow in a higher quality of life community -- starts with some basic preferences:
Type of living environment -- climate, lifestyle, density preferences
Presence or absence of certain professional infrastructure and services: what has to be in place to provide business opportunities for starting or buying a business?
Will you be able to meet cost of living and income needs that fit your interest, expertise and most enjoyable / transferable skills?
J2020F: So, in the Outpost, individuals and teams begin with research and intelligence gathering about broad regions based on climate, lifestyle, and general growth potential?
Eagle: That's right. We begin like those fishermen over there -- see them casting out their net?
J2020F: Yes.
Eagle: We cast out a wide net, and then narrow them down the best choices for us to pursue.
Explorer: The mistake most of us make is fishing with a small net.
J2020F: So, we screen out a lot of fulfilling opportunities without realizing it?
Eagle: If there's one point we want to get across, it would be this. Simply put, we now have the flexibility to live anywhere we please and not be beleaguered by a long commute between home and office.
Explorer: If you've been following everything up to this point in the journal, you'll see our research and intelligence gathering concludes that with the onset and acceptance of new technologies, means of communication, and energies, almost any geographic area can support both or personal and professional goals.
Eagle: Harry Dent offers some things to look for: "a new look that includes intelligent town planning for increased human interaction; and abundant open space; flexibility in home design; planning for safety; shared facilities; and high-tech communications infrastructure."
J2020F: So, the only real question becomes, which one is right for you?
Got Knowledge?
Copyright ©2002 - 2006 Aarnaes Howard Associates. All rights reserved worldwide.
7:41 AM
Saturday, August 02, 2003
Timeshare This: Correction, Boom, Bubble, Burst, Bust, Correction, Bear-Depression
Chapter Three
By Steve Howard, CKO
The Knowledge Labs
Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories
“Every journey must begin somewhere. For this expedition, the greatest in American history, it began in the mind of Thomas Jefferson. America’s third president had wanted to send an exploring party into the West for many years. In 1783, he had proposed such a venture to Revolutionary War hero General George Rogers Clark, William’s older brother. The Hannibal of the West had declined. Two subsequent attempts to have the West explored and the existence of the Northwest Passage proved also died aborning.”
James J. Holmberg
Journal of 2020 Foresight: Have you ever felt embarrassed when out of the blue you bump into someone who looks really, really familiar, but you can’t place him?
Did we work together in the past?
Do we go to the same dentist?
Were we in the same graduating class?
And, usually for me that embarrassing moment happens in locations out of context. As, when I met Lone Eagle sitting at a bar table underneath the azure blue umbrella on the patio, steps away from the lower pool. Somebody in the Jacuzzi waved to me and I had no idea who he was.
Eagle: Surprise, didn’t you see Lost Explorer?
J2020F: Oh my gawd. That’s who it was. He looks so different in a bathing suit. Or is it this setting, overlooking Medano Beach and the Sea of Cortez? And, I hadn’t had my first 2-for-1 special. But, here they were, the neo - Lewis and Clark and me, their chronicler, in the middle of the resort action in Cabo San Lucas, Mexico.
Eagle: The last time we all got together you interviewed the two of us with Pathfinder and Trailblazer.
J2020F: How well I remember. What Pathfinder described at the end of the evening when the beach bonfire burned itself down to glowing red and orange embers kept me awake until 3 a.m.
Explorer: (Joining us at the patio table) Oh, the second of Dent ‘s two predictions?
J2020F: That period of prosperity is followed by the “mother-of-all-depressions” as he describes it.
Eagle: Starting sometime in 2010 and lasting until 2025, as I recall.
Explorer: Well, that certainly got my attention the first time, too. And, now I feel more of an urgency to make the most of the next 5 or 6 years and then figure out how to hang on for a decade.
J2020F: Nice transition. With both of you here, I’d like to learn more about the Outpost. Trailblazer described the 8 scenarios and ended my stay on the Ridge telling me what the HR executives found when they completed rehearsing their decision. How did your original scenarios turn out? Have you updated them at all?
Eagle: In the Outpost, as you already know, we pick relevant signposts and indicators to monitor as we move forward to our destination. We both discovered that the terrain ahead isn’t smooth like on paper or in plans and in models.
Explorer: It’s more three-dimensional. Over the next two decades from 2003 to 2020, just in terms of an economic climate, we anticipate a correction, boom, bubble, burst, bust, correction, and that long bear / depression.
J2020F: So, like another roller coaster ride. Taking us uphill, then screaming downward again for quite a ride, until 2020?
Explorer: That’s right. We’ve been monitoring Harry Dent’s forecasts with his analysis of three recent bubbles for clues – Japan, Internet, and the Nasdaq.
J2020F: What have you concluded from the first?
Eagle: As a leading indicator, Dent says Japan’s major demographic peaked in terms of a spending wave two decades ahead of our boomers – roughly in 1989 after dominating the marketplace when it emerged in the late 1960s.
J2020F: As a leading indicator?
Eagle: As a scenario for our economy. I mean, when their consumers aged and cut back on spending, Dent says the Japanese government focused on key manufacturing technologies while propping up their real estate market through low cost corporate debt.
Explorer: Those policies set in motion two bubbles – stock and real estate – both of which burst and triggered their long bear market that may bottom out in 2004, according to Dent.
J2020F: Is there another Japanese spending wave any time soon on the horizon?
Explorer: As it turns out, their economy may behave as the mirror opposite of ours. Dent forecasts their next spending wave to exert itself in 2008 or 2009 and extend into 2020.
Eagle: I’m sure you picked up snatches of conversation around the pool here about our upcoming real estate bubble.
J2020F: Uh huh, some of the conversations seem to be about wondering if real estate will suffer the fate of the other two bubbles.
Eagle: When the Internet hit the 10% break out turning point – in the number of U.S. households early in 1996 – it only took two years to accelerate into a bubble from 1998 to 2000.
Explorer: The Internet stock index grew 7 times in 18 months alone, before crashing 92% from its highs.
J2020F: What’s Dent’s prognosis?
Explorer: In 2001, the Internet penetrated 50% of homes and will likely reach early maturity – in 9 out of 10 homes – in 2007.
Eagle: But, he doesn’t expect the index to recover everything wiped out.
J2020F: Why not?
Eagle: Basically, it’s the nature of the Internet. It allows computers, mobile devices, and content to be leveraged, but it’s not a highly profitable product or infrastructure in itself.
J2020F: So it enables other industries to become more efficient, but doesn’t hold up as a viable business model?
Explorer: When you peal away the layers, you see that semiconductor chips and software are the driving technologies.
J2020F: Now, what about the third bubble, the Nasdaq?
Eagle: It actually began before the Internet index, sometime in 1995, but accelerated in parallel – from 1998 to 2000.
Explorer: As it turns out, it didn’t wipe out as much of the previous gains as did the Internet, nor did it last for two decades like the Japanese bubble.
J2020F: Knowing what you know now, how do you apply it?
Explorer: We’ll go into more detail later, but based on Dent’s work, we’re focusing on 5 time periods to shift our stock market and real estate investments: 2004 to 2006, 2006 to 2008, 2009 to 2010, 2015 to 2020, and 2020 to 2023.
Eagle: The strategy for the first period actually began in the late 1990s. Dent recommends buying growth stocks – both small and large capitalizations – but more large, while heavily investing in international emerging countries.
J2020F: So, if I’ve got a 401K or an IRA and want to invest in mutual funds I’m looking to diversify into those funds?
Eagle: Right. Dent recommends 15% of your portfolio should be in the small caps, with 35% in large cap, another 10% in Real Estate Investment Trusts, around 20% in an international fund – emerging countries in Asia (but, not Japan yet), Latin America, Russia and eastern Europe – another 10% in developed countries, such as Europe, Hong Kong, Canada or Australia, and the last 10% in high-yield bond funds.
J2020F: What about during the next phase – late 2006 to late 2008?
Explorer: This period precedes the major correction, so he suggests moving out of stocks into long-term treasury or very high-quality corporate bonds.
Eagle: Then during the next period – 2009 to 2010 – or, as Dent says after the first serious U.S. and global stock correction, shift 20 to 40% of your bond portfolio into Japanese stocks, and some European.
J2020F: So, you start to buy Japanese stocks ahead of their run-up based on their next demographic spending cycle.
Eagle: That’s right . You’re not really trying to outguess the markets in the short-term. Rather, you’re looking for long-term buying opportunities.
J2020F: But, what about during the depression?
Explorer: Between 2015 and 2010, Dent recommends a strategy of buying global stocks of emerging countries and small cap stocks in the U.S. Plus, he says step back into real estate to take advantage of the exurban migration.
J2020F: And, what about his investment strategy during the fifth time frame?
Eagle: From 2020 to 2023, he forecasts another long-term bull market. So, he recommends a return to a classic portfolio – 30% in large caps, 20% in small caps, 10% in real estate, 30% international, and 10% in bonds.
J2020F: A moment ago we talked about the real estate gossip around the pool. And, you said Harry Dent predicts that investing in the Internet technologies might not be the best long-term strategy. So, what’s the connection between the two?
Explorer: Dent says new technologies provide us with new means of communication and with alternative energy sources, almost any geographic area can support both or personal and professional goals.
J2020F: So, he’s predicting support for the “It’s Wired (Wireless) – Doing What I Want Anywhere” scenario sooner than later?
Eagle: Correct. He cites the following four trends as the reason:
“Basic innovation in communication technologies is allowing more people to relocate their homes to small towns and exurbs, and telecommute to business;
The baby boomers are moving into their vacation-home-buying years, which, in combination with the first trend, will stimulate demand for property in attractive resort towns;
The echo baby-boom generation is now moving into its household formation years, which will stimulate demand for apartments and rental property in the cities, and has already caused commercial property in these areas to appreciate; and
There is a broad geographic migration towards areas of the country with warmer climates. You can expect the first three trends to be accentuated in the southwestern United States.”
J2020F: And, the bottom line, then becomes select the highest growth area -- south of the Mason-Dixon line, and to the west. Concentrate on a region based upon your climate, lifestyle and growth stage preferences.
Explorer: Remember that when Oscar picks us up tomorrow morning for our timeshare presentation.
Got Knowledge?
Copyright ©2002 - 2006 Aarnaes Howard Associates. All rights reserved worldwide.
4:43 PM
Friday, August 01, 2003
Toasting Lewis and Clark in Cabo -- Where the Land Ends and the Fun Begins
Chapter Three: The Outpost
By Steve Howard, CKO
The Knowledge Labs
Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories
"On August 31, 1803, Captain Meriwether Lewis set sail down the Ohio River in a fifty-five foot keelboat with a temporary crew and some young men on trial. His destination was the Falls of the Ohio. It would be in Louisville, Kentucky, where he would rendezvous with his partner in discovery, William Clark, and the men he had recruited. And it would be from Clarksville, Indiana Territory, that they would continue down the Ohio. Their destination: the Pacific Ocean."
James J. Holmberg
Journal of 2020 Foresight: "Whatever you do, don't sign anything," the groom's neighbor told me the weekend before at the wedding reception 15 miles from Newport Beach on the Pacific Ocean. "Not only can you save on the transportation to and from the airport, they'll give you free activities and some cash, too." So I anticipated meeting Oscar. I paid $75 as a deposit returned to me two days later following the timeshare presentation.
Lone Eagle: "Oscar, let us relax for one day, and then we?ll join you for breakfast at the Pueblo Bonito on Sunset Beach, ok"?
J2020F: Except for the cable station broadcasting spring break from the Giggling Marlin and Cabo Wabo, I don't know too much about Cabo, and I?m a little confused. There's the sign to San Jose del Cabo in one direction once we get out of the airport area, and Cabo San Lucas in the opposite. Where do we go?
Eagle: Down to the tip of the Baja peninsula -- Cabo San Lucas. Both destinations make up the Los Cabos area of Baja California Sur.
J2020F: On the plane down here I read we're in a tropical paradise less than 1000 miles from the U.S. Mexican border. The groom's neighbor vouched for the relaxed atmosphere, great food and drink "where the land ends and the fun begins -- where you can golf, fish, snorkel, swim or dive, kayak, surf or sail."
Eagle: All of that is true, but still a long way from the days of the original beachfront resort -- the Hotel Hacienda Beach Resort, in a sleepy little fishing village.
J2020F: What do you mean?
Eagle: In five years the number of hotels rooms available has doubled.
J2020F: So, that's what you meant when you said we'd talk about how to apply Harry Dent's Innovation (.1%, 1% and 10%), Growth (10%, 50%, and 90%) and Maturity (90% to 99.9%) model to investments?
Eagle: That's part of it -- using his growth model as guidelines for investing in a portfolio of tangible and intangible assets. The word on the street estimates it will take 15 years before Cabo hits the world-class resort development status. But a lot has happened already.
J2020F: Like what?
Eagle. Well, The Puerto Paraiso entertainment Plaza, situated on the Cabo San Lucas marina, is nearing completion and encompasses 50,000 square meters, and already houses many new stores and restaurants. Fine hotels and quality resorts such as Sol Melia Hilton, marquis Playa Grande, Pueblo Bonito and others have build new resorts or expanded their current facilities to meet the demands of increased tourism.
J2020F: Do those examples qualify as signposts or indicators to monitor?
Eagle: Oh, right. You're referring to the last step in the scenario process Trailblazer described on the Ridge.
J2020F: We discussed how rehearsing the future for the HR Executives revealed applications they hadn't thought of, and led to the identification of internal growth and external industry indicators to monitor. Depending upon how the indicators changed, the HR executives could trigger shifts to either an innovation or efficiency initiative for their organization.
And, if you had targeted an organization as a potential employer or as a client, knowing those indicators could give you a get a leg up on the competition.
But, we didn't find out how you and Lost Explorer rehearsed the future, and what indicators you tracked.
Eagle: Well, let's just say you came to the right place.
J2020F: You mean you're going to reveal the secrets?
Eagle: No, I mean we're here -- the Villa del Palmar Resort and Spa.
J2020F: Great!
Eagle: Why don't you check in and then meet me at the lower pool bar, it's still 2-for-1 happy hour. We can relax and continue our conversation. The lobby is over there. See that nine-story structure? It's an atrium with a waterfalls, salt-water aquarium and seashell chandelier. The lobby's just inside. You can't miss it.
J2020F: So, then we'll continue with the 2020 Foresight signposts and scenario indicators.
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