Ha!!! Next Bull Market for Stocks May Hinge on ‘Net Gen-ers’

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ByLoSellHi

http://www.bloomberg.com/apps/news?pid=20601109&sid=a1R37H_4tCTw&refer=home

Bull Market for Stocks May Hinge on ‘Net Gen-ers’: Chart of Day

By David Wilson

March 19 (Bloomberg) -- The next bull market in U.S. stocks may be kicked off by Americans who grew up with the Internet, according to Tobias Levkovich, a Citigroup Inc. equity strategist.

“The Net Generation” -- Americans born between 1977 and 1995 -- will enter the peak time for saving and investing in three to four years, Levkovich wrote in a report today. The pending shift suggests inflows are likely to exceed withdrawals from retiring baby boomers, he wrote.

The CHART OF THE DAY shows the number of U.S. births from 1945 to 2006, the most recent year for which U.S. government data on live births is available.

Baby boomers were born between 1946 and 1964, as noted in the chart as well as Levkovich’s report. Their biggest savings years began in the 1980s, and they contributed to a five-year surge in share prices that ended with the October 1987 crash.

There were 71.8 million “Net Gen-ers,” approaching the baby-boom total of 75.9 million, according to data from the U.S. Department of Health and Human Services that Levkovich cited in his report.

“Their sheer numbers should translate into net new money entering the savings/investment continuum, albeit at a less robust growth rate than during the 1980s and 1990s,” the strategist wrote.

(To save a copy of the chart, click here.)

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net
 
Their biggest savings years began in the 1980s, and they contributed to a five-year surge in share prices that ended with the October 1987 crash.
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Then this little piggie went to market and saved and saved until the crash of 2000. Then this little piggie went to market and contributed to the surge in share price all the way until 2008.

Thanks mom, great story.
 
Quote from gnome:

Which generation is more debt-laden? Seems intuitive it's the Net-Gens...
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I'm not so sure about that. But regardless, it's the Baby Boomers who were the first generation of ADULTS to absolutely go nuts with debt and push the no-money down, 125% LTV mortgages, refi every 6 months, 6 year car loans with 3 previous upside down loans tacked on, 12 credit cards from every major bank and department store.

They were the ones that would have tought the Net Gen how to spend more than you make on a monthly basis.
 
Quote from clacy:

I'm not so sure about that. But regardless, it's the Baby Boomers who were the first generation of ADULTS to absolutely go nuts with debt and push the no-money down, 125% LTV mortgages, refi every 6 months, 6 year car loans with 3 previous upside down loans tacked on, 12 credit cards from every major bank and department store.

They were the ones that would have tought the Net Gen how to spend more than you make on a monthly basis.
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I was thinking perhaps the Boomers were close enough to the Depression Era to have remembered the lessons of their parents... who NEVER would have re-fi'd without a gun to their head...

Those who used credit to excess were encouraged by CONgress and business... too bad there was no LEADERSHIP when it was needed.

All of this could have been avoided had mortgage requirements stayed sensible... aka, down payment/collateral, debt-income ratio reasonable, 80% LTV, etc... as it was when I bought my first house.
 
What Net Geners have any money to save?

Laden with huge debt from college, poor job prospects when they leave, they can barley make ends meet at the moment. Compared to when I was there age they live in adject poverty.
 
Quote from Halal Burger:

What Net Geners have any money to save?

Laden with huge debt from college, poor job prospects when they leave, they can barley make ends meet at the moment. Compared to when I was there age they live in adject poverty.
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I'm of the belief the economy will not have the opportunity to show real growth until after the Boomers die off... 30-40 years... and maybe not even then.

The economic and social decline we are seeing (and still early on in the process) will be structural and permanent...

By the time most people understand and accept this, we will have had a "Japan-like" experience.... 20 years from the now the market is still making new lows.... unless of course, hyper-inflation and currency destruction let the market soar...... which won't mean anything when adjusted for the loss of buying power in currency... :mad:
 
I agree with you completely, gnome.

An interesting facet about Japan is that the youth there watched what happened during the the last 15 years or so, and they have little interest in equity markets, and for that matter, contrary to what the projections were when the Nikkei was at 40,000, little interest in consuming that much - in fact, few young Japanese even aspire to own cars (though their mass transit system is extremely efficient and modern).

I'm an avowed capitalist and always will be, as the net benefits of capitalism in motivating people through profit incentives to devise and invent methods and means of improving the human condition and solving all manner of problems in the world (including environmental, ecological, health, nutrition), but I don't think people in general will be nearly as conspicuous in the next several decades as they were in the past decade or so.

Will the sheer growth in the world's population outweigh any future drop in consumption on an individual basis? The population growth argument hasn't worked out too well in the past - equity market booms have depended on asset bubbles in the past, for the most part.

Quote from gnome:

I'm of the belief the economy will not have the opportunity to show real growth until after the Boomers die off... 30-40 years... and maybe not even then.

The economic and social decline we are seeing (and still early on in the process) will be structural and permanent...

By the time most people understand and accept this, we will have had a "Japan-like" experience.... 20 years from the now the market is still making new lows.... unless of course, hyper-inflation and currency destruction let the market soar...... which won't mean anything when adjusted for the loss of buying power in currency... :mad:
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More Wall St. horseshit. Everything in the lives of net gen's is leased, they'd lease their clothes if they could. They are presently watching the wealth of their parents , read their inheritances, be obliterated by the markets. They are afraid of the markets and see them as a scam. I know many net gen's making over 100k, they save zip although that's changing
 
Being from L.A. you're ground zero in the net-gen investment phenomena: They're heavier weighted into real estate than equities. Me and my friends slept on Murphy beds in studio apartments but whipped around 100 lots in futures. Today I meet guys in their mid-30's with no mutual fund exposure but instead they're paying down a 900k house.


Quote from Banjo:

More Wall St. horseshit. Everything in the lives of net gens is leased, they'd lease their clothes if they could. They are presently watching the wealth of their parents , read their inheritances, be obliterated by the markets. They are afraid of the markets and see them as a scam. I know many net gens making over 100k, they save zip although that,s changing
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