• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Jim Cramer

Jim Cramer: Understanding Millennials Is Hard for Wall Street

There's no real millennial analyst cohort on Wall Street. But the Toll Brothers analyst call illuminates some key trends.
By JIM CRAMER
Dec 11, 2019 | 07:12 AM EST
Stocks quotes in this article: ULTA, AAPL, TOL, WMT, TGT, HD, COST, AMZN

Those pesky millennials keep changing the landscape and both Wall Street and Main Street seem oblivious to how their moves impact our country.

It's difficult to discern their moves. They seem disguised to the naked eye. They are fickle, they sample, they try something, like something and then move on from something almost in unison. They like cruises for the value, then the value gets erased by higher prices, often to please investors over customers, and they move on to something else. They like camping, calling it glamping, and then they lose interest, jumping to another instagrammable pursuit. They love putting on make-up, storming the aisles of Ulta Beauty (ULTA) for the best of the best, and then they turn on make-up for lack of newness -- is it too caked and looks ridiculous on the finely tuned new cellphones from Apple (AAPL) ? Who knows?

But one thing's for certain. They are always on the move. Hard to typecast, hard to define, but on the move nonetheless.

There's no real millennial analyst cohort on Wall Street, although there sure should be. Instead you have to break down silos to find the movements of a group that's now as large as the baby boomers with a lot more spending power -- and a lot more trepidation about spending, courtesy of the great recession and years of living in bedrooms they would have long abandoned during my generation. My mother made my room in to a den the moment I graduated high school.

You want a good silo to peak into to chart their latest moves? Join me on the always-thoughtful Toll Brothers  (TOL) conference call, the dissection of business from the company that calls itself, justifiably, America's luxury homebuilder. It's a shame that we view conference calls as nothing more than "raises forecast, cuts forecast, raises gross margins, feels margin pinch" affairs because the utile terminology totally obscures the thematic approach Toll offers to those who bother to listen to it.

The thrust this quarter, 10 years after Americans started coming out of the bunker and started buying houses post-the Great Recession bottom? Let me just quote CEO Doug Yearley about the new buyers, the "growing numbers of millennials who are older, more affluent and more discerning when they buy their first home." How do we characterize what they want? "Think of it as a BMW 3 Series, a great example of affordable luxury." Stunning fact that buttresses the characterization? "Over 20% of all closings have one purchaser 35 years old or under."

This is no fluke: These buyers are nationwide in places as diverse as Boise, Northern Virginia, Denver, Orlando, New Jersey, Massachusetts, New York, Las Vegas, Reno, Phoenix, Philadelphia, Jacksonville and Seattle. Those are regions not beholden to Silicon Valley. They aren't constrained by the elimination of State and Local Tax Deductions, as they were supposed to be. They are simply people who have jobs, who feel confident and are taking advantage of affordable luxury, a term that defines their ethos.

Why is this cohort so important to understanding the investing landscape? I think it's because the empirical work that Yearley and co-founder Bob Toll -- still chiming in on the call -- is non-political. Everything is so charged these days it's hard to see the forest through the trees. Classic example: just yesterday I said that the new trade agreement among the United States, Canada and Mexico was a win for the American worker in the face of big business -- something that both Speaker Pelosi and the president's people have told me -- and I was criticized on Twitter from both sides saying I was in the pocket of both the Democrats and Republicans.

I have no idea what party affiliation Doug Yearley hails from, I just want his unfiltered view -- and he provides it. After a decade of cocooning, the millennial wants a home that, like everything else she chooses, represents value, in keeping with her newfound frugality. The delay is over. The spend is beginning. The prices of these homes are not going up any time soon: Costs are stable for the first time in a very long while. Rates remain low.

The millennials will go to Amazon (AMZN) , Costco (COST) , Home Depot (HD) , Target (TGT) and Walmart (WMT) to personalize their places. They will use their cellphones to order what they can't pick up and get it delivered. They are changing the landscape for the positive in an undeniable fashion. You just don't know if you read the funny, biased papers, or watch TV, both of which obscure the good trends and make it impossible to see the investing light. I say go read the Toll call and walk into the light. It will make you money.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long AAPL, HD and AMZN.

TAGS: Earnings | Investing | Markets | Housing Market | Jim Cramer | U.S. Equity

More from Jim Cramer

Jim Cramer: The House of Pain Stocks vs the House of Pleasure Stocks

Jim Cramer
Apr 19, 2021 4:05 PM EDT

Amazingly, one group isn't just left behind, it just keeps losing money, while the other group is shrugging off this day with aplomb.

Jim Cramer: For GameStop, It's Now All About the Plan

Jim Cramer
Apr 19, 2021 12:37 PM EDT

With George Sherman out as CEO, everything, including every mistake, is now on Ryan Cohen.

Jim Cramer: Tensions Between the U.S. and China Continue to Rise

Jim Cramer
Apr 16, 2021 7:23 AM EDT

I see no path to improve relations and many to make things even hotter.

Jim Cramer: The Sins of a Messianic Market

Jim Cramer
Apr 14, 2021 7:26 PM EDT

We have crypto worshippers, false idols and those who believe selling can equal betrayal.

Jim Cramer: The Tale of My Apple Watch

Jim Cramer
Apr 14, 2021 6:19 AM EDT

I keep saying own Apple, don't trade it. If not? I can't help you.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:05 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How recency bias and the Pareto Principle impact y...
  • 02:42 PM EDT PAUL PRICE

    Wednesday on Real Money Pro

    Make this stock a 'part' of your portfolio.
  • 04:44 PM EDT PAUL PRICE

    Pretty Incredible + Hard to Believe

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login