Why Your Kids Are the Best Consumer Discretionary Analysts
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| By Tony Sagami |
My father loved three things: my mother, baseball and Jesus.
He was a deeply religious man but seldom went to church because he worked 100 hours a week on his vegetable farm.
Farm life was hard, but my father believed hard work was an entrance requirement to get into heaven. And he expected his sons to work almost as hard as he did.
But the long hours that my brother and I put in seldom came with a paycheck. We would complain that Lincoln forgot to abolish child slavery, because we sure didn’t get paid for the work we did on our farm.
I hated it at the time, but my father passed on a very strong work ethic to his children. And I tried to do the same to my children. I always made sure that my children had a long list of chores, but there is no substitute for life on a farm.
However, I’ve found other ways to put them to work.
What I’ve found is my children are some of …
The Best Consumer Discretionary
Analysts on the Planet
I don’t feel old but I’m certainly not on the same page as my children when it comes to music, fashion, slang, attitudes and most importantly, spending patterns.
Since roughly two-thirds of our gross domestic product comes from consumer spending, the spending habits of teenagers and young adults have tremendous investment implications.
My big mistake used to be giving too much credence to retail analysts — other old farts — and failing to listen to four of the best retail analysts in the world: my children.
My kids have nailed dozens of major retail trends and identified some of the most profitable stocks you could have owned.
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Thanks to their pleadings for things like Nike (NKE) sneakers, iPods and iPhones, Activision Blizzard (ATVI) video games, Monster Beverage (MNST) energy drinks, meals at Buffalo Wild Wings and more, I’ve been able to get in early on several retail stock moon shots.
”Daddy, can you please buy me an iPod? Everybody has one!”
The whining started in November 2005. At the time, Apple’s (AAPL) iPods costs more than $300, a price I thought nobody would pay.
Wrong! Apple was selling for a split-adjusted $2 a share at the time and has skyrocketed since.
“Daddy, please buy me a pair of Air Jordans …”
I almost fainted when I saw the +$100 price tag for a pair of sneakers. But all my children’s friends were wearing them. Nike has split twice in the last decade and more than quadrupled in value.
“Daddy, can I have $2 for a Monster?”
I forbade my children from consuming energy drinks, but I also noticed all their friends were constantly chugging them. Monster Beverage is up 68,000% over the last 20 years!
There are many other examples of hot consumer trends that my children tipped me off to.
Even though my kids didn’t toil in the vegetable fields, they have made me a lot more money than my brother and I ever made for our father, thanks to their insights on consumer trends for teenagers and young adults.
My children are young adults now, but I still watch how they spend their money.
That includes Tesla (TSLA), Apple, Netflix (NFLX), Door Dash (DASH), McDonald’s (MCD), Lululemon (LULU) and Bitcoin (BTC).
If you have teenage children or grandchildren, put them to work and ask them what they want for their next birthday. Their answers could make you a mountain of money.
All the best,
Tony
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