Thursday, April 05, 2007

The Baby-Industrial Complex

W: Several years ago, my roommate and I came up with a consumer spending strategy with the simple goal of making the products we frequently buy also go to work our investment portfolios. First, we take a hard look at the products we buy, and then we buy stock in the company that produces the product. That way, we "gain" from buying the products as long as the stock price goes up over the long run.

At the time, Anheuser-Busch stock was in. Later, after we purchased houses, Home Depot and Lowe's made more sense.

Fast-forward 7 years, our lives have changed. Mikey and his wife are expecting their first this summer, and the Deuce is going on 3 months old. The strategy & goal is the same, but the companies have changed.

First, let's cover the obvious. Carter's, Baby Bjorn, Fisher-Price, Babies 'R' Us, Graco, Target, Costco, etc., are companies that fit into the Baby-Industrial Complex (BIC). It should be a law that every new parent is issued shares in a BIC mutual fund as soon as the parent signs the birth certificate(s).

Next, let's talk about companies that produce Duracell and Energizer. I harbor a strong belief that an unholy alliance/vast Battery Manufacturer-BIC conspiracy exists, but nonetheless all parents should buy stock in Battery Manufacturers. Woe the night that the swing runs out of batteries at 2 a.m. And since you must buy batteries, you may as well feel better about it by owning the stock in the company.

Also, I encourage you to get creative. For instance, take my local dry cleaner. He's making a killing on me now! My dry cleaning bills have risen lockstep with the Deuce's ability to dodge the burp cloth and hit my sweaters with spit up. So don't be afraid to look at private companies...diversify!

That's enough - I know there's more to investing than what I've presented here, but I'll tell you, when you're buying the 20th package of batteries in as many days, the sting in your wallet won't hurt nearly as bad.

Posted by Walker Lockhart @ 12:29 PM

Read or Post a Comment

Nice Post! I read your stuff all the time. How you find the time to do this is beyond me!?

A couple of remarks to your "BIC"

P&G owns Duracell; always a good bet.
Also, look at HAIN and THS; makers of Earth's Best organic and Del Monte baby foods!


Posted by Blogger Brian @ Saturday, April 07, 2007 9:30:00 PM #
<< Home