Let the truth be told: Millennials hate being called millennials by old people.
It's as if those born pre-1980 are treating us (yes, I am one) millennials as fat, stupid cattle -- grouping us in holding pens and imagining clever ways from which to prosper. This latest round of earnings has lent itself to ever more companies using the word millennial. The term is being used to explain anything from subpar performance to justification for a new round of initiatives orchestrated by 70-year-old white men. And I suspect the usage of this buzzword will only rise in coming years.
Consider these tidy stats, compliments of Bank of America Merrill Lynch:
- Globally, there are 2 billion millennials, with 86% living in emerging markets.
- In the U.S., which boasts 75 million cash cows known as millennials, they are set to overtake the baby boomers in 2015 as the largest living generation.
- Millennials are the No. 1 workforce demographic in the U.S., and account for $1.3 trillion in direct annual consumer spending. Bank of America estimates annual incomes of the millennials will reach $8.3 trillion by 2025 in the U.S. alone.
- Yep, millennials stand to be a wealthy bunch through no effort of their own besides climbing through the womb since 1980 (many don't like to work hard anyway, they have a sense of entitlement). They are set to benefit from the "Great Wealth Transfer," the $40 trillion-plus of assets that will shift from U.S. boomers to their millennial cows over the next generation.
- Globally, millennials will account for about 75% of the workforce by 2025.
So there are the buzzy stats to package up and ask your money manager how to profit from in the years ahead. As for the millennial characteristics that will drive the value of any related investments, well, Bank of America has grouped them into catchy traits. Some of those traits:
In the words of this youthful, social-media-friendly group, "WTF?" I think you need to be very careful on approaching investment themes off millennials. And believe me, the pitches from money managers are going to start coming in hot and heavy. The reason for the caution is that we millennials can't all be herded like dumb cattle so neatly into defining characteristics. Our personality nuances are many, and confusing. We prefer certain companies over others "just because." Those allegiances change very quickly. What we tell survey takers and research gatherers is often a bunch of BS because we are too busy trolling Facebook (FB) and, increasingly, Twitter's (TWTR) Periscope.
Here are brief analyses on some of the characteristics supplied by Bank of America as key millennial themes.
- Adventure: We don't take vacations because we are either broke or afraid to take a day off for fear of losing status in the office. Our daily adventures include a trip to Chipotle's (CMG) crazy long lines for lunch and then to Whole Foods (WFM) on the weekend to buy five products. That's all we could afford, which may explain why Whole Foods is creating a smaller, more affordable shopping concept. Want to invest off our alleged adventurous spirit? Buy some Chipotle or Whole Foods shares, gift them to your millennial children in your will. Chances are their spending at Whole Foods will increase by the year 2025 as a result of the security blanket that is their newfound wealth transfer.
- Collaboration: We don't work well with others because, frankly, we lack social skills (not me). Yes, that is a byproduct of years of sexting in AOL (AOL) chat rooms, as well as having wars against friends on Facebook and Twitter that consume our daily existence. Want to invest off collaboration? Buy more of Apple's (AAPL) stock, we love to pretend we are collaborating via the Apple Watch or iPhone. That game of pretend will increase as Apple continues to penetrate offices. Honorable mention: Toyota -- we plan to collaborate with fellow drivers in cheap-monthly-payment cars via more advanced infotainment systems.
- Connected: Another nod to Apple.
- Digital: Our eyes are constantly looking down into a phone, Apple Watch, whatever. We like that Under Armour (UA) has created a digital ecosystem for all our workout data. Our secret plan is to live forever, and we think monitoring our daily steps on the way to Chipotle will help that cause.
- Diverse: We aren't diverse, mostly afraid to take risks. Great news for big banks that are going to be holding our vast future riches. But perhaps bad news for online brokers -- we seek safety, and investing doesn't provide that.
- Educated: We will not skimp on school supplies for our kids after having it done to us in 1987. Good news for Staples (SPLS), especially as it digests its Office Max/Office Depot businesses.
- International: We like things handed to us, preferring not to waste valuable brain resources in thinking. I think millennials are opening up to taking cruises, which offer a turnkey vacation and seemingly endless drinking and partying. Carnival (CCL) sails the most kids in the business, a positive as we start to have families over the next five years.
- Liberal: We view McDonald's (MCD) as the enemy. More uplifting news for Chipotle and Shake Shack (SHAK) shares.
- Me: We will screw a family member on a holiday gift because, well, we spent the money at Starbucks (SBUX) and Chipotle throughout the year.
- Now: Speaking of Starbucks, see those mini fraps? We think they are so adorable, and want more of what the company is selling.
- Sharing: We don't share, that is except for updates on Facebook.
- Values: We value organic food, and don't even realize most of the stuff is coming from publicly traded Hain Celestial (HAIN).
Correction: An earlier version of this story incorrectly stated that there are 750 million millennials in the U.S. The correct figure is 75 million, according to Bank of America Merrill Lynch.