Dinner Out Is in our DNA

 | Apr 04, 2013 | 11:36 AM EDT
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Getting blown away by this restaurant move yesterday and today as major research firms up their ratings and say it is time to get in the group.

I am flabbergasted because if the consumer is really hurting, if the payroll tax mattered, if the delayed tax refunds mattered and if the higher gasoline prices mattered, these upgrades sure don't show it.

Yesterday Raymond James said that, after a hiatus, it is time to buy Panera (PNRA). Today Goldman said that Panera and Brinker (EAT) -- think Chili's -- should be bought because the consumer is spending because of increased optimism, particularly among the high-income bracket in the country. The same Goldman research piece also says that Starbucks (SBUX) is more popular than ever and has a terrific more-likely-to-recommend ratio than any other restaurant chain. 

From what you read in the newspapers and the Internet and what you hear on television, these moves by these brokerage houses make no sense. How is it possible that we could have any confidence at all given all of the negative news?

How can people be willing to spend $6 a throw at Panera for a signature Panini or that Asian Sesame Chicken salad, or shell out ten smackers for a dinner at Chili's or $5.01 on a triple venti cappuccino with skim, wet?

How come they are not staying home, isn't that what you do when things are tougher? How come they are not trading down to McDonald's (MCD), which, by the way, has some solid, more nutritional changes to its menu of late?

Simple. It's because we are a richer country than people realize, particularly when our houses and our stock portfolios go up in value.

Most people spend way too much time obsessing about a few dollars more to the tax man for all but the rich, and for the rich people a return to the old tax rates of the 90s was supposed to be catastrophic.

In reality, 98% of the people didn't have their taxes raised. Many of the remaining 2% have seen an increase in their chief asset, their home, that might actually make up for the increased taxes. Everyone, of course, feels better even knowing what their tax rates are, something that the fiscal cliff resolution finally gave us.

I agree with all of Goldman's research except the takedown of Domino's (DPZ) to Buy from Conviction Buy and the dissing of Chipotle (CMG) as no longer as cool as it used to be.

We spoke to Domino's CEO Patrick Doyle today and that company's more of an international company than ever and business sounds quite strong, hence why the name didn't come off the actual Buy list. Chipotle? I wonder if Food with Integrity ever goes out of style and that's what's cool about the Mexican chain.

More importantly, I think these upgrades are going to look very smart a few months from now because the raw costs, everything from gasoline to grains, are coming down right now and all of these companies are incredibly good at productivity and cost control.

This group's been a real underperformer of late. Right now the market wants to embrace those stocks that have underperformed, as opposed to many of the first-uarter winners, which are getting hammered. I think they have once again become go-to places when we get foreign-related selloffs as these are domestic security growth companies and that's the stock antidote to the Japanese, European and Chinese central bank irrationality that's playing out just now. And remember, we aren't a poor nation, we aren't a frugal nation, we remain a nation of spenders and going out to dinner's always been in our DNA, especially when we're feeling good about ourselves, which is what happens when our stocks are up and our houses no longer going down in value.

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