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Wednesday, April 17th, 2013
food and drink

13 0417 food drink

By now you’ve probably seen the year-by-year  progression of “How Quickly the U.S. Got Fat” from 1985 onward.  (If not, here’s the animated map from the Atlantic.)

Notice how the food and beverage stocks have done over the last few years, shown above.  Strong absolute performance in the top panel (with that noticeable kick higher of late), and great relative performance.  Sure, the big bursts of outperformance came in weak market periods, but notice that the relative gains weren’t given back when the market did better, as you might expect.

(That series has only been around since just before 2000, so a bonus chart appears below, adding another decade, but also another vice in the mix — tobacco.  Even given the very weak relative performance during the go-go years of 1997-1999, food, drink, and smokes trounced the market.)

It doesn’t take a giant leap of imagination to see a connection between the great stock performance by those peddling food and drinks to the crowd — and the crowd getting fatter every year.  They have it down to a science.  (Chart:  Bloomberg terminal.)

If you haven’t seen the new puzzle pieces on Tumblr, the recent topics have included Peter Bernstein on gold, Jim Grant on everything, structured products for sale on the Street, and investment managers pressing the edges when it comes to credit risk.

13 0417 food drink smokes