I’ve been using a saying attributed to Warren Buffet this spring in presentations to groups about current markets: “It’s only when the tide goes out that you learn who’s been swimming naked.” At this point, the more appropriate saying might be: “You can drown when the tide rises above your head.” The Ch. 11 bankruptcy protection filing by Alamo Iron Works on April 5 was triggered by what the company alleges was non-payment of $1 million for work by a large customer.

This is not likely to be an isolated incident. Increased sales are great, but I’m hearing about difficulties with supplier lead times, financing inventory and cash flow.