We’ve been saying, “Get long rich people,” for some time now. With the U.S. economy heating up and the stock market lifting to new highs, luxury spending is back.
The data we track as a barometer for luxury goods spending is teased out of the government’s Personal Consumption Expenditure numbers. That measure – covering everything from spending on pleasure boats, aircraft, jewelry and watches – is up +8.2% year-over-year.
In other words, the resurgence of the high-end consumer is real. Consider luxury homes sold by real estate broker Realogy, says Hedgeye U.S. Macro analyst Christian Drake. The volume of homes sold worth more than $2.5 million is up 29% year-over-year.
It’s no coincidence, therefore, that we added Realogy (RLGY) to our Investing Ideas newsletter back in April. (The stock is up +22% since we added it, versus 5% for the S&P 500.)
We’re reiterating our call today: Stay long rich people.