Do I make too much of millennials? Are they really that important? Do we have to constantly be vigilant about what they do and who they are and what they are up to?
Unfortunately for those older than the cohort, which is loosely defined as those born between 1981 and 1996, you have to know what these people are doing. Worse, you actually have to start worrying about post-millenials: an amorphous group born after the century mark who are now coming into their own and represent 25% of the U.S.'s population.
I say "worse" because for the most part, both generations' actions are unfathomable to many of the people who manage money in this country, unless they have millennials who are still running around their houses because they are too broke to move out.
So, by sheer numbers, if you do not focus on their buying patterns you are missing a huge chunk of the money being spent by consumers.
I would like to think that I have been at the forefront of 1) trying to figure out the commonalities of their consumption, and then 2) trying to profit from them.
What has precipitated my momentary consternation about what some call my fixation on millennials? Yesterday, I put together a thesis that says millennials like protein, particularly chicken, and that could be a big motivation behind the purchase of both Popeyes Louisiana Kitchen (PLKI) by the burger-laden Restaurant Brands International (QSR) and yesterday's snagging of Buffalo Wild Wings (BWLD) , by the Roark-backed Arby's, another beef-oriented chain. It makes perfect sense that these two buyers see that they are too red-meat oriented in a time when millennials are moving toward what's perceived to be healthier poultry offerings.
I got some snickers from my Squawk on the Street partners David Faber and Carl Quintanella for that assessment, and -- given that they are both closer to the cohort than I am and because they are sound, rational people -- I wanted to recheck whether I have gotten off track and am now obsessed with something that can't be all that important to stock prices.
But let me tell you where the poultry thesis stems from: Tyson Foods Inc (TSN) , the nation's largest publicly traded producer of meat and chicken, which first explained to me that there's a big shift going on toward poultry by younger people. Given that Tyson has had a repeated pattern of better-than-expected earnings largely because of poultry, who am I to challenge that assumption? They have the numbers. I am just putting two-and-two together.
It could be totally random that these two beef-oriented fast food chains idly picked two chicken purveyors, but if you go back to what Cheryl Bachelder, the CEO of Popeye's before the buyout, told me, the category is the fastest growing of all quick serve -- and it sure isn't because my generation has suddenly started gorging on birds.
You want an upside surprise, you want a takeover, then you have to be thinking about these things.
Go deeper with me. How about the gigantic upside surprise from the recreational vehicle maker Thor Industries Inc (THO) ? THO is by far the number one company in the category. I have been behind Thor's stock for ages. Why? Because I think that this business is no longer in cyclical mode -- related to either auto or housing spend. I think it is in secular growth mode, because the millennials have recognized that it is an inexpensive, experiential method of vacationing.
Millennials are frugal. If they can avoid paying for a hotel room, if they can spend $15 a night in a campground rather than ten to twenty times that for a hotel room, they are going to do so -- especially if they have all of the comforts of home.
Again, if I didn't focus on the cohort, I would never have caught what so many other investors think: that the bust portion of the boom-bust cycle has to start momentarily.
Now, I am stopping short of the ultimate driving force of millennials -- documentation of their lives -- as a reason for the poultry-takeover pattern, even as I often think I am looking trimmer and better if I am eating protein from poultry than from other sources. I am not saying that's why we are getting these bids. But I will say that it's a big reason why RVs have gone from cyclical to secular mode. Not only are they cheaper, they take you to more fabulous backgrounds for pictures and blogs than you'll get from a Four Seasons or a W hotel.
Many of the millennials are Instaradoes -- the name my daughter and I have come up with for those obsessed with their social media feeds -- and RVs are a perfect way to satiate their obsessions. I could go on and on. Suffice it to say, though, that I have caught a lot more upside surprises trying to think like millennials than by dismissing their patterns. Until proven wrong, it's the way I will continue to think and will continue to ponder before making pretty much any investment at this moment in time.