Bikers, Bullets and Booze

 | Jan 15, 2014 | 4:00 PM EST
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Tuesday, I wrote about the stocks of companies with a predominantly female consumer base and the growing structural and demographic headwinds they are facing. Let's look at the impact this has had on men and the stocks and products of companies that cater to them.

Throughout history, unless changed by manmade edicts, nature has consistently produced more males than females. Births by gender are roughly 51% male to 49% female. Nature itself has determined that males are of a lesser value to the propagation of the species than are woman. Men also have shorter natural lifespans, with the average mortality further reduced by men typically being employed in more dangerous professions than woman, with the greatest risk coming from military service.

Beyond the need for the two sexes to mate in order for the species to be continued, there are traditional mutual needs between men and women that compel them to pair up. Those needs are sociological, emotional, physical and, more pragmatically, financial. The mutual financial aspect of the relationship between men and women and their motivations for pairing has traditionally been that women need men as providers and men need women in order to advance financially. Married men traditionally make more money than single men do, and they are more successful professionally because society deems married men to be more responsible, reliable and trustworthy.

The genesis of this virtuous mutuality from which both sexes benefit, as well as the economy and society in general, is that men need to be needed by women. Without that basic need, the rest of the mutual and sociological benefits will not materialize. The growing number of women in the permanent labor force since the end of World War II has increasingly challenged the basic need women have for men. The result has been a steady decline in household formations, marriages and births.

More immediately, though, with respect to the impact of this trajectory on U.S. economic activity, is that although male income is degraded by a diminishing need for them by women, the ability to shift income away from the needs of women and children and toward personal desires is increased. The stocks of companies catering to men's desires are capitalizing on this and outperforming the stocks of companies catering to women that I wrote about yesterday.

These stocks include Anheuser-Busch InBev SA/NV (BUD), Boston Beer Co. (SAM), Snap-on (SNA), Home Depot (HD), AutoZone (AZO), Harley-Davidson (HOG) and Sturm Ruger (RGR) -- alcohol, tools, cars, motorcycles and guns.

The performance of these stocks (and others I will list in the comments section), has been stellar over the past two years, with an average appreciation of about 100%. Although the principal commonality among them is their predominantly male consumer base, the revenue driving the performance of the companies and their stock prices is coming from money that in the past would have been allocated by men toward women and children.

The sociologic and economic shift away from household formations, marriages and child-rearing that have allowed these companies to perform so well shows no signs of reversing.

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