Read today’s paper sideways and three ‘life’ stories — a shrinking beer can, a bowling-alley feud and million-dollar ranch towns — turn out to be one dispatch from one economy. Let’s connect them.
Three exhibits
Exhibit one: the beer can. Sierra Nevada and Modelo-maker Constellation Brands are pushing ‘pony’ cans into the biggest beer week of the year — smaller pours for drinkers who want to moderate.
Do the per-ounce math and the price usually went up. Sell less, charge more, and the customer says thank you. That is pricing power surviving a shrinking market.
Exhibit two: the bowling alley. America’s league bowlers are at war with Lucky Strike, the Wall Street-backed owner turning alleys into blacklight party venues.
The spreadsheet logic is cold. A birthday party buying nachos and neon cocktails out-earns a league bowler on discounted rates. So the league lights go out on the eighth frame and the lasers come on.
The loyal regular who provided decades of steady demand is being traded for the big-spending visitor. The capex — the money a business spends on buildings and equipment — follows the premium customer now.
Exhibit three: the ranch town. Austin sold 729 homes over $1 million in the first four months of this year, versus 262 in the same stretch of 2019.
The boom has jumped to Wimberley, Dripping Springs and Spicewood — $600,000 renovations, $5 million custom builds, a café wall with 1,500 personalized mugs, a Target where the feed store was.
Further down the page sits an $85 million spec mansion — built to sell, not to order — behind armed security, one door from Mark Wahlberg’s $37 million buy. The premium buyer sets the market now.
One pattern
One day’s paper, three life sections, one conclusion: business has reorganized itself around the customer with money.
Economists call it the K-shaped consumer — the top half climbing while the bottom half slips. Today it is not a chart. It is a landlord, a bartender and a realtor.
We have been building this evidence file for weeks — the $1,500 Vegas sky villas, the $18,000 sauerkraut consult, the WSJ poll showing even the comfortable feel broke. Today adds three more entries.
How we’re positioned
This is exactly the world our themes assume. Theme 1 — Fiscal-Dominance Inflation — holds pricing-power compounders like Procter & Gamble, Coca-Cola and Deere, because companies that can charge more per ounce survive a 4% inflation world.
The pony can is that thesis in a koozie.
Our Midterm Election dividend holdings pair a defensive core with the consumer names on the receiving end of premium spending.
And the bowling story supplies the risk control. We favor franchises that reinvest in their regulars — call it the Costco test — because loyalty is the cheapest capital a business has, right up until it is gone.
When the anecdotes, the poll data and the price action all describe the same economy, an allocation stops being a guess. It becomes a documented pattern.