January Newsletter: ‘Happy Birthday to you, Happy Birthday to you’

01 February 2024

Back in 1964 something strange happened. The UK witnessed an unusual phenomenon. More than a million births were registered in a single year. While this was a regular occurrence in the first part of the twentieth century (there were more than 1m live births each year from 1900 to 1914) that number of births has only happened three times since. In 1920, 1921 and 1964. In 2022 births in Britain numbered just 673,141. The fourth lowest number for 150 years or more!

Whatever the reason for the spike in births in the early sixties, 1964 marked the final year of that well documented generation known as the Baby Boomers. Spanning from 1948 to 1964 the generation encompassed the demographic explosion in the West that came in the wake of World War II. The baby boomers’ pure numbers compared to previous generations have shaped trends and investments like no generation before or since. With life expectancy soaring they’ve hung around longer too. This means there will be more 60th birthdays in Britain in 2024 than ever before.

However, something is changing. Baby boomers’ parents tended to be young when they gave birth and have lived for a long-time, pushing life expectancy in many Western countries into the eighties. So, our 60-year-olds of today will be holding their big parties this year expecting another 25 years of fun. But that isn’t happening. Death rates are rising sharply for those aged between 55 and 65. Experts may ponder the reasons, but it seems pretty simple – they partied too much already. At an age when their parents were looking after babies the baby boomers were out drinking. It shouldn’t be a surprise that beer sales in the UK hit an all-time peak when these folks were in their early 20’s.

So perhaps investors focusing on healthcare and care homes as places to invest are missing a trick.  If these boomers start realising they aren’t immortal after all, investing in airlines and camper van makers might be a better way to go this year. They are celebrating after all. Being the first generation invited into the throw-away society, it will be difficult for them to stop a habit of a lifetime.

It’s also difficult to feel sorry for them. They have benefitted from the global house price boom, and the globalisation of the world without having to pay the price of their largesse that climate change will surely demand. They have in general had it good, it has just been about them… the selfish generation? So, the parties should on the whole be half decent affairs. As for investing, pub companies, I think. After all it is difficult to find a candlestick maker listed on the stock market these days…

-Craig Harper, Managing Director.