Carty Capital Management
Carty Capital Management




Good Morning,


Before I get to a thought of the day - thought I'd share something funny.


There was a lady driving her brand new Mercedes Benz convertible down the road in Florida one afternoon.  She was speeding - but heck, everyone was speeding.  Alas, she noticed blue lights coming up from behind her as a highway patrolman was clearly headed her way.


Instead of doing what one might expect, she sped up faster and led the office on a chase for a short time.


Finally, she pulled over - surely expecting this to be a very uncomfortable discussion as she rolled her window down.  The conversation went something like this:


Officer:  "Ma'am, why in the world would you speed up faster when you saw my lights?"  Disgusted and before she could even answer, he added, "Tell you what - it's 4:15 on a Friday and I have to be back at the station by 5:00.  Given I'd much rather not be doing any paperwork this late in the day, if you can give me a really good reason for all of this - something I have not heard before - then I will let you go with only a warning."


The lady, sitting nervously, thought for a moment and finally spoke up.


Driver:  "Well Sir, a few years ago my ex-husband ran off with a female highway patrolman - and I was afraid you were bringing him back."


Officer:  (tipping his hat) "Ma'am, you have a good weekend."


A Perspective to Consider


You can imagine I hear lots of stuff each day.  Calls, emails, comments, questions.  It's all good - but there is usually a theme.  I call it the "yeah, but" theme.


You know - when you think of something that is factually good and then find a "but" to follow it up with and dash the positives against the rocks.  The media and expert prognosticators are very good at this...and the general audience eats it up.


Look, there will always be crappy things in markets, portfolios, headlines - or anything related to investing for that matter.  There will always be a stock that sucks.  There will always be a response that sucks.  There will always be a 90-day report that misses.  There will always be a year that sucks, a quarter that sucks and mixed in the wash - a result that sucks - in the near-term.


Please walk with me on this though....


What Demogronomics teaches us is akin to this storyline below:


Let us pretend for a moment that you are a big Chicago Bulls fan (by the way, you can insert any team from any league).  Let us further pretend that your team is in an important game.  Maybe it's game 7 of the semis - or the tie-breaker for the season to get into the playoffs.  Whatever - it is an important game.


Let us finally pretend that you missed the live game itself and have it on DVR for when you finally get done at the office.  You try your very best to not hear about the result as you drive home and you do a great job until the door closes in your garage and that your iPhone dings with a text.


Since we are all hooked on our phones these days, you automatically look - it's only 5 words "Bulls win at the buzzer!"


Wow...darnit.  There you go - evening smashed right?


But, instead you still want to watch it anyway - so you do.


The first quarter ends with the Bulls down 6.


How do you feel?


They go the half after a tough second quarter, bloodied and bruised in battle - Bulls down still - but only by 4.


How do you feel?


The third quarter tells you your team must have kept their spirit to win in the locker room.  They fall further behind - by 12 at the end of the 3 - and the crowd quiets.


How do you feel?


Now, the last 1:21 in the game - Bulls down by 5.  Any NBA fan knows the last 1:21 of an important game takes longer than the first 58 minutes.  After all, it seems that something magical happens and each Coach is secretly awarded 5,392 timeouts.


Back to the do you feel?


What is the Point?


The point is this:  Demogronomics is the end game.  People drive economies and markets.


Demogronomics is the text you got from your buddy with the end result.  Forget the noise, the fears, the negatives and instead, consider these facts:


78 Million people we call Baby Boomers will make certain parts of our economy busier than they have ever been - for the next 30-40 years.


86+ Million people we call Generation Y will make completely change all that we "know" of the world.  Indeed, exiting - scary too - but what a wonderful landscape ahead.


The brightest horizon one can imagine?


Or 5 points down, you on the edge of your seat, 1:21 left in the game - and you don't know the end.


I close with this from UBER and NASA just today - staggering huh?:




The geniuses that are becoming adults will make the world we live in work better, faster, more efficiently and productively.  Things we cannot even define today, across many industries, will be built and become regular parts of life.


Don't fear it -


Instead, consider this idea:  You got the text.  You knew the Bulls win at the buzzer.  So the entire game while you watched, how you felt was impacted by your understanding of the end.


Instead of feeling down - even when you had every reason to be - my hunch is you felt better, more excited - anticipating the end game not fearing it.


Friends - think Demographics - not Economics.


We are in great shape - even though we know there will be times along the path we will be or feel down, times that many things will stink, times that don't feel good, times we are uneasy - and quite nervous.


And in case you might be wondering about those geniuses growing up to be adults - whether we agree or not - they are coming.  And the good news is there are a record number of high tech jobs waiting for them to change the world for us:





I close with these lines from the Sunscreen Song that are just fantastic when one feels stressed or like something is not working (just like the end of every quarter in the game above):


Sometimes you're ahead,

Sometimes you're behind...

The race is long, and in the end,

It's only with yourself


As the bulk of earnings are in (will give stats in tomorrow's notes) we MAY see some chop here as people get ready for holidays.  Normally, it picks up again a few days before the Thanksgiving Break and then a jaunt into the finish....


And then you might ask?  The whole comp game begins again.


I suggest we just start having New Years every decade instead : )


In Summary


Demogronomics keeps you on this leading edge but requires a much larger, more patient view of the elements at work.


I hope the Bulls game story above helped with the perspective of what's next.


Just remember, it's the long-term currents we need to invest upon - not the short-term waves which will assuredly always roll ashore to block the horizon.


Those waves are the noise too many will likely continue to be lost in...and the reason the long-term game is so hard to win based on fearful activities.


Play it Again Sam....


Pray for that correction.


In the end, like it or not, long-term investors have learned Demographics Rule The Long-Term Game


Generation Y is set to do much greater things - far beyond what the Boomers accomplished - or what can be defined today.


Imagine explaining an iPhone X to your buddies in 1982 - and then extrapolate that forward for the next 35 years.  We will see things look a lot more like Star Trek than we can currently imagine for all the Trekkies out there - and the UBER note above is just a slight scratch of the surface of change ahead.


Until we see you again - may your journey be grand and your legacy significant.


InvestingMike Williams