Avocado Toast and the Stock Market
I wrote this on the subway and I love my conclusion at the end about avocado toast and stocks
I think it’s hard for a lot of people to make sense of the stock market today. I know you’ve seen the news. You probably can’t stand American politics, you hear about student debt, wealth inequality, and those f’ing millennials eating avocado toast. Wtf is going on.
Sometimes when you think about the stories you once heard about America many years or generations ago, like the coal mines, the steel mills, and the hard work that went into laying railroad tracks and building skyscrapers of New York City while eating lunch from the rafters, you just want to make sense of it all. How’d we go from there to here?
I want you to look at the image above. The one of the men eating lunch from a giant steel beam hanging miles above the ground. What does that look like today? Like if we had to find a modern parallel? Maybe a bunch of young programers eating a catered lunch next to their computers? This is where we’ve come from and now where we are.
The S&P 500 is up over 250% since the Financial Crisis.
Avocado toast consumption is probably up even more than that.
$9, $10, $11, and $15 avocado toast is something no other generation of people have experienced. Especially throughout history and under the age of 30. Forget the avocados, just think about the price to make one, the cost to buy one, the ridiculously low switching costs to get something cheaper and similar. Yet people are still going crazy for it and particularly one generation of people. I believe no other group of people has ever had this luxury.
In debt or not, it’s great for the economy, spending money on things like avocado toast. Saving is great, but a nation of savers is actually terrible for an economy. Every dollar you save is a dollar taken out of circulation. Economies thrive on the circulation of money. So now not only do we have a generation of spenders who could care less about savings, we also have a majority of people in a single generation having the ability to access something no other generation could at such scale. What did the young people enjoy in France several centuries ago? What were the young people of 70s enjoying? We young people today have it good.
Which brings me to the following chart showing avocado toast sales and the S&P 500. The stock market is brilliant in its ability to forward look and if it is doing so today, I think it is simply saying “we can’t wait to own all your debt and spending. We will gladly grow up with you millennials while you eat avocado toast.”:
It kind of reminds of that video game line that turned into a major meme but instead it says, ALL YOU AVOCADO TOAST ARE BELONG TO US.