My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. My posts are blunt, opinionated and even have a twist of humour/sarcasm. You've been warned. Please note the blog posts are time sensitive and subject to changes in legislation or law.

Monday, June 27, 2022

Identifying Potential Stock Investments Through Demographic Trends and Everyday Awareness

If you are a Do-it-yourself investor (“DIY”) or have a “play account” (while your investment advisor/manager invests most of your money), you are likely always looking for potential stocks to invest in (well maybe not the last few weeks ☹).

People use various methods to identify stocks, from reading business newspapers and magazines, to subscribing to investment newsletters and monitoring stock chat forums etc.

Once a stock is identified, many people run the company through stock criteria filters (utilizing various earnings methodologies, revenue, dividend history, PE ratio’s etc.), read financial statements and Management Discussion and Analysis and any other number of due diligence methods to determine if any given stock meets their investing criteria.

Today, I want to discuss using demographic trends and everyday insights to identify stocks that you may considering investing in.

Demographic Trends

Earlier this year, I virtually attended Outlook 2022, a roundtable discussion hosted by Wealth Stewards Inc. a full service planning and investment firm. The roundtable participants discussed the economic and stock market outlook for 2022. There were also discussions on tax, real estate and demographics.

I found the discussion with Kenneth Gronbach, a well-known American author and demographic specialist very enlightening. Ken somehow makes the complex topic of demographics, easy to understand.

During his presentation, Ken gave a couple examples of how demographics may play out in the future. In his first example, he noted that the sales of eyeglasses are to a large extent driven by Presbyopia (which is essentially our eye's ability to see things up close getting worse as we age, typically starting at 40-45 and older). He noted that optometrists generally resolve Presbyopia by simply prescribing reading glasses.

Ken noted that the largest generation in history of the United States are millennials born 1985-2004 who are currently 18-37 and heading to the age where Presbyopia will be prevalent. So, if you sell eyeglasses, and look down the time continuum, you will know there should be a lot of business heading your way. In the same way this demographic information is good for an eyeglass manufacturer, this information is also very useful for an investor who is looking for companies that will have strong markets in the coming years.

He also discussed that in the United States, demographic data suggests that due to the population size of the millennials, there will be a housing shortage of 25 million housing units over the coming years, despite the fact the Baby Boomers will be selling. I was a little surprised to hear this, as personally I had thought the opposite, that baby boomers would be selling into a market with limited demand.

Ken also noted the human body typically starts to fall apart at 75 (for me it was 55 ☹). Because of the size of the baby boomer (1946-1964) population and the wealth many Baby Boomers have, there will be a critical mass of money and motivation to put towards health care. This would be very important demographic information for the health care industry and someone looking to invest in health care.

If you listen to the round table, Mr. Gronbach has other examples. However, the key take-away is that demographic information is not only useful for end sellers, but it can also be used by investors, especially by those who invest with longer time horizons to identify potential stock and/or sector investments.

Economic Trends

Following Mr. Gronbach, Nick Griffin of Munro Partners spoke. He is the founding partner and chief investment officer of Munro and has been managing global long / short equity mandates for over 15 years.

Mr. Griffin spoke about economic trends, such as cloud computing, climate change and silicon demand. He feels that silicon and semi-conductors will be huge in the coming years. He bases this on the fact semi-conductors drive the digital economy and human progress.

Whether he is correct or not will not be determined for several years, but again as an investor, if you agree with Mr. Munro’s assessment, the “trend will be your friend”.

Everyday Awareness

Peter Lynch was the director of Fidelity Magellan Fund from 1977-1990 and is almost as revered as Warren Buffet for his ability to pick stocks. In one of his books Beating the Street, Mr. Lynch suggested average investors can beat Wall Street professionals by using information they encounter in their everyday lives. He told the story of how he invested in Hanes (for those old enough to remember, Hanes pantyhose were made famous by the TV advertisement featuring New York Jet Joe Namath in panty hose) after his wife told him about the popularity of L'eggs pantyhose amongst all her friends.

Even though the advice is over 30 years old, it is still as relevant today as ever. As an investor, using day to day information could mean observing a company/sector you deal with in your job that is rapidly expanding (assuming your company does not have any prohibitions about purchasing shares of supplies or customers and it is not insider information) or seeing the use of Artificial Intelligence grow in your industry. A simple example of everyday awareness over the last 15-20 years would have been watching your kids plead for iPods, then ipads and finally iPhones. Ever parent should have invested in Apple if we were paying attention.

It is interesting how we observe day to day trends, but often we do not take advantage of these observations when making our investments.

Please note: I am not an investment advisor, and I am not suggesting the use of any one particular investment identification methodology or the purchase of any particular investment.

The above blog post is for general information purposes only and does not constitute investment or other professional advice or an opinion of any kind.

This site provides general information on various tax issues and other matters. The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situation. Please note the blog post is time sensitive and subject to changes in legislation or law.


  1. I like the part about eye glasses. What’s interesting is while I am accustomed to paying anywhere from $300-500 for my glasses at the local mall(I’m 55 years old), my 20 year old son uses online services to buy a similar pair for himself for $70. Technology can make predictions obsolete very quickly. That’s why I index.

    1. thx Anon, good point about technology, but maybe you should invest in the eyeglass company your son is using if that is where the eyeglass biz is going :)