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Americans have always placed a
premium on individualism. As far back as the colonial period, writers like
Alexis De Tocqueville in Democracy in America have characterized the
country as a place where the ultimate dream is of comfort and prosperity
for everyone, as well as personal freedom and spacious solitude. For a long
time big cars traveling open highways leading to sprawling houses,
punctuated by beautiful natural scenery have symbolized the American Dream.
Today times have changed, and this vision of America has become untenable
in the face of a growing population and evaporating natural resources.
Nonetheless, people still love the spirit of this idea and revert to it in
times of stress and threat.
In particular, one manifestation of this kind of behavior
can be seen in a number of recent events. A behavior called
“cocooning”, something sociologists say Americans do during
times when there are high levels of threat and stress present in the
societal atmosphere. Cocooning involves opting to spend more time at home,
doing comforting activities either with immediate family and friends or
alone. For example, after 9/11 people stayed at home more often, and more
couples chose to have babies. After the dot com bust, people drank more
beer and ate more burritos, rather than expensive wine and sit down
restaurant meals. Now, people because of war, natural disaster, and
political and economic uncertainty, cocooning, in some ways, is back.
At the same time as Americans are spending more time at
home, or in other casual settings, their interest in athletic activities is
also increasing. Consequently, Americans are also bringing the spirit of
cocooning to their sporting activities. More people are getting into
outdoors activities, and casual All-American pastimes, rather than going
dancing at night clubs, or experimenting with unfamiliar athletic
classes.
2.
The Big Movers and Why
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A recent big mover epitomizing
this cocooning sports trend is Wolverine World Wide (NYSE: WWW), a
producer of work clothes, and athletic/sporting goods,
including footwear, which went up 9.88% on October 5, 2005 on positive
earnings ![]()
news. According to Wolverine
World Wide’s quarterly earnings report, especially profitable
lines included Patagonia, Harley Davidson wear, and Hush Puppies and
Merrell shoes. Not only was Wolverine World Wide able to tap into the
all-American desire for wide open spaces and empty roads with back packing
and motorcycling equipment, but also on the desire for a comfortable,
casual life style. Patagonia and Merrell sports equipment and Harley
Davidson shoes and outfits appealed to the desire for open spaces and
solitary adventure, while items like Hush Puppies loafers and Patagonia
fleeces appealed to the desire to spend the weekend at home with the kids.
3.
How to Use the News
As a general rule, investors cannot be highly successful
in the retail and consumer goods sector without a firm grasp on popular
culture. While many financial research firms and distributors and producers
of consumer goods actually hire professional “trend spotters”,
or “cool hunters”, the individual mostly requires a more
general understanding of trends. Consider the basic fears, insecurities and
wants present in society. Keep on top of the news, think about how the
stories you read relate to these social issues, and determine how you think
these factors will influence consumer trends and spending habits. From
there, use your conclusions to help weigh your investment decisions.
4. Last Week in Media
Sentiment
Recent correlations between MediaSentiment.com's thumbs up
/ thumbs down recommendations for Heads Up™ rated companies
and subsequent daily volume over the three month average show a strong
relationship. The correlation between ratings for MediaSentiment.com
selected stocks and their volume the next day over the three month average
is 100%. Therefore, this week, MediaSentiment™ gave an edge up
to 100% to smart investors who used Heads Up™ recommendations
to trade on volume!
All figures reflect all
MediaSentiment Heads Up™ recommendations for the week of
October 3, 2005 through October 7, 2005, rating companies on the day of
their quarterly earnings releases correlated with their stock highs, lows,
closing prices and daily volumes for the subsequent day.
5.
Links you can use
Taking Advantage of Trends: Cocooning
America Gets More Physical at Leisure
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