According to almost every study I’ve ever read about the issue, nearly 90% of all diets fail. Pick your diet fad: Atkins, South Beach, Grapefruit, Scarsdale, Abs, Soup, Oprah, Dr. Phil, the Biggest Loser, or any other passing fancy. It matters not. They all fail. The reason: habits. Good habits never replace the bad ones. Thank God!
Why is this good news? If you are an investor, I would suggest betting on the odds that America’s fickle love affair with lean personal budgeting will pass faster than …..America has been on an economic diet since September 2008, and personal spending dropped like a rock at the end of 2008 and into 2009. Some claim Americans are entering a new age of personal fiscal responsibility and that new habits of spending and discernment are forming. But American diets always fail.
While not a scientific measure, I have notice an uptick in restaurant activity, lines at checkouts, and cars in mall parking lots. And I have noticed it personally, as well. I’m eating out more, my summer travel schedule is full, and my “Want List” is rapidly increasing in size. Yes, Americans want to spend. Just as the New Economy of the 1990s failed miserably and replicated the pattern of Old Economies and bubbles past, the New Frugality, likewise, will fail miserably. Americans want new. Americans want shiny. Americans want to buy. Americans need to buy. Americans need to want. Going without is always temporary.
Warren Buffet said recently that the recession will be over soon, but that he’s not sure when exactly. How profound. In June 2008, I went to cash and sat on the sidelines. I’ve been buying the market (QQQQ) since January and will continue to do so as the economy and the markets turn around. The market is a leading indicator of the economy . . . by about six months . . . so over the course of this year we should start to see good news from American businesses. American businesses and consumers are starting to spend again, so the impact will be profound. Choppy markets ahead, no doubt, but as Americans kick yet another diet to the curb, it’s onward and upward in 2009.
Eat up!
