Jim's a (fictitious) friend of mine.
Used to be a hard worker, but somehow lost his mojo and now just lazes around. He halfheartedly looks for work from time-to-time, but since he got laid off from a cushy Wall St. job, he doesn't see the benefit of taking lesser compensation for a 'lesser' job.
He basically has lived off some money left to him by a grandparent and the good name of his family.
Well, last year, as his stock account was getting blasted, Jim began to cut back on his lifestyle. Fewer parties, restaurant visits, trips, etc. He even cut out dry cleaning and his maid, resorting to wearing jeans and t-shirts to all but the most formal of events.
This year, though, things have changed. It seems another inheritance has arrived and Jim's back to living the high-life. No new job, just more money.
If Jim were a stock, he wouldn't be investable. He's generates no cash, and builds no value with the money he spends. Yet, here we are, jacking up all the stocks for companies that Jim supports.
The Gap (GPS), Nordstrom's (JWN), Cheesecake Factory (CAKE) and Starwood Hotels have all doubled from the lows. Ford's (F) a triple from March.
Now, we can quibble about whether it's government stimulus (the new inheritance) or people feeling better that is driving less-bad results from consumer stocks, but we can all agree that there's less income out there to consume retail products.
I hope I'm wrong, because life is more fun when the stock market goes up, but I fear I'm not.
