The (Investing) Times are Changing

Growing up as a fan, follower and worshipper of Benjamin Graham, David Dodd and Warren Buffett I came to see certain common stocks as just “making sense” because they played very well into the tastes and sensibilities of the American public. Certain products (and stocks) were very popular with the mainstream, so revenues were consistent and improving, and their business models made sense. Companies like Coca-Cola, Gillette, Geico, American Express and McDonalds and others also had a common trait – they were products that were frequently used (and used up) and had simple product that did not need to have constant investment to stay relevant. In short, they were not sexy, cutting edge companies, but they were ultra relevant to the average paying American and in being so relevant and frequently purchased, they were very, very profitable.

As the tastes of the average American have started to change, so has the potential for these stocks.

Now, “old school” fast food has fallen out of vogue, and “healthy fast food” has gotten hot. Consuming soda pop (diet and regular) has also fallen ouf of style. Add cigarettes to that list and you can see that the public appetites are changing, and changing quickly.

Keeping that same train of thought though – the “new cornerstones” are rotating in…

Chipotle (CMG) is a perfect example of a stock that started small and has consistently outperformed. Gas guzzling automakers are cash intensive and have bankrupted themselves as they struggle to stay relevant. Tesla (TSLA) on the other hand is well over $200 PPS and is not profitable. Look at Solar stocks like FSLR, while volatile, are starting to take off too…

I guess the question on my mind is this – can the stocks of the old school tastes thrive and prosper in this new environment? Only time will tell. My guess is that it will be difficult for McDonalds and Coca-Cola will struggle to change the public perceptions of their products, no matter how much they push into product offerings that resonate with a more health conscious public…

Again, I am not a professional, just the midnight ramblings of a fan of the stock market…