ALTERNATIVE CONSENSUS(Positive Consensus/Bear Market Indicator) Going off the beaten track

May 15, 2015

Our search for signs of economic consensus can sometimes take us away from the traditional sources like Soothsayers (Economists and market forecasters) and the mainstream media. Several analysts and investors look at unusual data, hoping it will help them spot economic trends sooner or understand them better than those who rely on conventional fare. Sometimes you just have to wander off the beaten track.

Best In Show but does anyone hear?

Kim Forrest, who works for the Pittsburgh-based Fort Pitt Capital Group, believes participation in dog shows is as middle class as it gets and as such is a great economic gauge. “This is the very definition of disposable income.” Forrest also saw a reason for concern when she took part in a dog show in western Pennsylvania last month and found that the number of entrants has been slipping. “This really told me that things were not okay.” She believes regional shows she attends across the country are a better gauge than nationwide data which have held steady, but are skewed by big, high-profile events attended by professional breeders.

Gun Permits  Rising

Maybe it's because of Obama policies or fear of the next Y2K, but it appears Americans are arming themselves more. Requests for background checks for gun purchases are on the rise. Socially it's not a great thing to see, however guns cost a lot of money and you just don't roll out of bed and buy guns like that. Guns cost  money so there must be some disposable income kicking around to enable. this.

The Infrastructure Around "I Do"

Bill Smead, chief investment officer of Seattle-based Smead Capital Management, for example, was encouraged by the frequency of Southwest Airlines TV ads promoting low fares for the upcoming wedding season. “Weddings are usually followed by buying houses, having babies and buying cars that fit car seats,” he says. “That is the driver of the U.S. economy.” Smead acknowledges that it could take years before the newlyweds decide to have offspring, but says his investment philosophy is about being patient, sometimes contrarian, and looking years ahead, often with the help of non-standard indicators.

Beware

Tim Duy, economics professor at the University of Oregon, says offbeat indicators can help investors crystallize their views, but they need to be careful with their interpretation. “The challenge of these indicators is to separate out the movements attributable to non-economic factors,” says Duy. For example, firearm sales could rise in anticipation of tougher gun laws, he says. Analysts and investors say that while it is not a precise science, going off the beaten track is well worth the effort.