By
Gary Scott

International investments benefit from spotting trends was my thought as I watched Chilled waters on Turnagain Arm lash at Fire Island. Bitter cold and tendrils of icy grey. Alaskan spring freshness fights the low clouds that scud in a mackerel sky as the airplane banks low. 

International investments were on my mind in May 1968. This is my first flight, Portland Vancouver, Anchorage, Tokyo and onto Hong Kong and we are about to land in Alaska for fuel.  Then we headed east and once there in Asia, opportunity, exotic travel and adventure grabbed hold for nearly 20 years, a life of work and play outside the USA. With no background in travel or investing or business at all, who would have guessed. What a surprise to do all that! But I am a boomer and we were given the world.

Then two decades later upon returning to the US, the radio was filled with another surprise. The music played upon my youth once again reached my ears. Rock and roll music was everywhere! Echoes of Radio 91 Wonderful KISN (the AM Rock & Roll station of the 60s in Portland) were playing everywhere! Golden Oldies stations had taken over FM radio.

Quite some time passed before realizations formed an understanding that the same forces behind my first trip abroad had also kept that golden music playing.

One of the best ways to thrive and prosper in business and investing is by spotting trends and this message looks at a huge trend that we should not ignore.

The trend is created by demographics. A website on baby boomers says it succinctly.

“For the next nineteen years, one Boomer will turn 60 about every 7.5 seconds. Boomers are confronting a demanding life stage, fraught with unique developmental challenges. Representing nearly one-third of the U.S. population, this demographic tidal wave will continue to refocus businesses on how best to capitalize on a distinctive set of resolutions.”

I am a boomer entering this world in 1946 with the first of this huge, incredibly rich generation. Arriving early in the wave and remaining on the leading edge has brought a fortune. Simply put, by doing what appealed to me early meant that tens of millions of wealthy people were following in my tracks ready to buy what I already owned. This has been good.

Let me be honest-it took me a long time to figure out why success followed me, even when I made stupid errors. There is probably a slow leaner gene tucked away somewhere. However once the lesson has been learned….it stayed. So the trends of the boomers are seriously watched and this new trend is…well…new.  We boomers were promised the world. Then we boomers were given the world. Now this world is being taken away!

This fact was first highlighted for me perhaps two or years ago by no less a pair of celebrities known as Randy and Spiff, radio show hosts who claim that their origins are somehow related to Joliet State Prison.

Merri’s and my return to America (Late 80s) included a home in Naples, Florida and a cabin nestled nicely on a creek, among pine and fir, in the North Carolina mountains. This is a nice boomer living combination. The journey from home south to cabin north required a trek along Interstate 75. This route forced us near enough to Atlanta that our radio captured the realms of “FM Fox 97 Radio”. Thus confronting us with the Randy & Spiff show, our first Golden Oldie experience. (Naples Florida in those days still had an average age of somewhere near the centurion line-so Glen Miller was more the rave). Atlanta, Fox 97 and Randy & Spiff may have been among the first to play Golden Oldies.

Little heed was given…just nostalgic listening and some enjoyment wandering down memory lane. Of course as time passed these stations became the FM sensation. Eventually 60s and 70s rock could be heard almost everywhere.

Learn more about boomer trends at http://boomers.typepad.com

Then a couple of years ago Randy & Spiff intervened once more. While traveling north from Florida we came close to Atlanta. I tried tuning in FM 97.  Randy & Spiff were gone!

As these radio hosts put it at their website. “From February of 1989 until January 31, 2003 Randy and Spiff would wake up Atlanta. (Mainly because of the loud muffler on Spiff's car as he drove to work at four in the morning.) They would still be waking up Atlanta on 97.1 except once again they were fired.”  (By the way they can now be heard at 94.9 Light FM).

These two were leading the way. There were showing me (by their absence) a demographic factor of significance that was taking place. FOX Radio was showing even more. The station was appealing for its listeners to write in and say how much they enjoyed Golden Oldies. “Our advertisers want a new mixture of music that appealed to younger listeners”, the station said.

My remark to Merri was, “This is the beginning of the end.”

Now the erosion of boomer dominance is accelerating. You can see signs everywhere.

A December 19, 2005 article in USA TODAY by Tom Kenworthy entitled “Revamped resorts give boot to ski snobs” is one example. This article tells how ski parks are catering to snowboarders and says:

“In other words, this is no place for baby boomers willing to pay $81 for a day of polite skiing at Vail. For $35 a day, snow riders here will be catching big air as they slam through half pipes, slide atop rails and tables and attack ‘hit lines’ or a series of bumps, on a 16-degree slope. Music by Ludacris and the Beastie Boys.”

This trend of how boomers react to their maturity will have profound implications on our investments and business. The boomer site mentioned above points out four areas of significance now. 

First, one fourth of boomers have live-in parents. How they deal with them will create enormous opportunity.

Second, 30% of boomers are overweight and this creates health issues plus enumerable money-to-be-made situations.

For example, Randy Thornhill, an expert on marketing to boomers writes:“ When it comes their health, baby boomers act like Ponce de Leon and pursue their fountain of youth through water, not diet and exercise.” That is about all they do to stay healthy, according to the latest Southeastern Institute of Research/Boomer Project Boomer Trend Report. The research among 1,400 adults conducted in November 2005 found that Baby Boomers over the age of 50 say the most important things to do to stay healthy are to exercise regularly, eat a balanced diet and drink plenty of water.

“But when it comes to what they actually do on a regular basis, the only things Boomers over 50 say they do are drink plenty of water, take vitamins and get routine healthcare. They do not exercise regularly or eat a balanced diet.”

This shows how this site has been guided by its boomerish roots. We started focusing increasingly on investing in water since the beginning of this millennium. (However we also do eat a balanced diet and get regular exercise).

The third opportunity comes from the fact that 27% of boomers are singles. (This does surprise me!) and are the most avid users of internet personal ads.

Finally, Boomers are about to be screwed financially. Social Security is a mess.

Alan Greenspan made the point about Social Security when he said: "We may have already committed more physical resources to the Baby-Boom generation in its retirement years than our economy has the capacity to deliver." 

About a third of the boomers are insolvent and have net assets of less than $10,000 and those who are solvent have to deal with increasing inflation and a failing, falling US dollar. 

Great pensions won’t bail all the boomers out either.This creates huge avenues of opportunity.

These four problems are just the tip of the iceberg, so let’s keep our eyes on the boomers. We have profited from their ups and now and we can participate in the natural course of their reduced influence. 

We boomers are far from out of sight, but our influence is waning. This is a big trend. Do not miss it!  We won’t and look forward to sharing what we observe and learn with you.

By the way you can gain a clue on what to watch for in an article entitled “The New Power Generation-How you'll know when the boomers have lost control of the media.” 

The site says, “two post-boomer developments that boomers don't get and don't particularly care to get—namely video games and rap music—as a rich source of future ads.” The article suggests that when references and idioms relating to these developments start to appear in newspaper headlines and ads it “will be a slap at all boomers, who will grab their walkers and storm out en masse for a DonMcLean concert.”

The article also points out that post boomers consider the Beastie Boys (I honestly do not know who they are-nor Ludacris) as the Beetles of the post boomers. So when references in ads begin referring to these groups (look again at the USA TODAY article above) you’ll know what is happening.

And if you see and learn from it, you will enjoy good global investing!

Gary