This is my first summer owning a boat.
Never had one before, which is funny because I grew up in Miami, and you’d think everybody there owns a boat.
My family just wasn’t into boating. We were beach people, pool people, baseball and football people. Boat people? Not really.
But now we have a lake house, and I’ve got three little maniacs running around all summer long. So I figured, why not?
Let’s get a little boat, take the kids tubing, drink some beers on a Saturday afternoon, the whole thing.
And it’s awesome.
Watching my five-year-old scream while bouncing around on the tube behind the boat is one of the funniest things I’ve ever seen. The twins are obsessed with the water.
Everybody sleeps great afterward. Dad wins. America wins. It’s just about perfect.
But there’s one problem.
Apparently boating has a nickname: “B.O.A.T.,” or “break out another thousand.”
And let me tell you something right now.
It’s real.
The Racket
At first, I thought I’d outsmarted the system.
See, I’m not out here buying some absurd yacht with a helicopter pad and five bathrooms. I’ve got a little lake boat. This isn’t Miami Vice.
So I figured the whole “B.O.A.T.” thing probably applied to ocean guys with giant boats and monthly fuel bills bigger than college tuition.
Nope.
Boat slip? Thousand bucks.
New Cover? Thousand bucks.
Life jackets? First aid kit? Safety equipment? Ropes? Tubes? Cleaning stuff? Random boating gadgets I didn’t even know existed 30 minutes earlier?
Break out another thousand. Every single time.
It’s actually impressive.
The boating industry has somehow figured out a way to make every accessory cost exactly the amount where you sigh heavily and buy it anyway.
Somewhere in the middle of all this, I noticed something interesting.
Now, I’m on a small lake in the Poconos. Nobody here needs offshore navigation systems or deep-water electronics.
Most of us are just trying to keep the kids entertained, pull a tube, and make it back to the dock before dinner.
But when I walk the marinas in places like Miami or down in Avalon and Stone Harbor, New Jersey, it’s a completely different world.
Every boat seems to have the same electronics.
Garmin (GRMN).
Not most of them. All of them.
Different boats, different owners, different budgets.
Same screens.
Never Count Out a Great Company
For most people my age, Garmin will always be associated with those little GPS devices suction-cupped onto windshields before smartphones took over the world.
That’s how I remembered them until I bought a boat.
The more time I spent around marinas, boat dealers, and other boat owners, the more one thing became impossible to ignore.
Garmin absolutely dominates this world.
Whether it’s navigation systems, fish finders, radar, sonar, marine displays, or just about anything else that helps you find your way around on the water, Garmin seems to be everywhere.
Once I started paying attention, I couldn’t stop seeing it.
As investors, we know where to look next: the stock. Not surprisingly, the chart tells a similar story.
GRMN has been in a massive uptrend for years and continues to push to new all-time highs:
Absolutely relentless.
While most people still think of the company as the GPS device sitting on their dashboard 20 years ago, the market appears to be recognizing something pretty compelling.
Sometimes the companies people stop talking about are the ones quietly executing the best.
You’ve got a company most people assumed got disrupted years ago quietly reinventing itself and dominating an entirely different market.
And we’re seeing more and more of this these days.
The market constantly reminds us not to get anchored to old narratives.
People still think Netflix (NFLX) mails DVDs. People still think Amazon (AMZN) sells books. People still think Nvidia (NVDA) makes gaming cards.
People still think Garmin is that GPS thing your dad yelled at in traffic 20 years ago.
Meanwhile, the stocks are sitting there making new highs while everybody’s telling outdated stories.
The funniest part? I looked up the average cost of a Garmin setup for a boat.
About a thousand bucks.
You can’t make this up.
Maybe the Best Hedge Is Participation
At some point it hit me.
If I’m going to keep breaking out another thousand every few weeks anyway, maybe I should at least participate in the racket.
That’s one of the beautiful things about the stock market.
You don’t just have to consume. You can own.
If you’re constantly spending money on something and everybody’s spending money on the same thing, it’s probably worth paying attention to the companies benefiting from it.
That doesn’t mean every boating stock is a winner.
But Garmin clearly figured something out.
There are others, too.
MarineMax (HZO) sells boats. Malibu Boats (MBUU) dominates wake boats.
Brunswick (BC) owns a massive collection of boating brands, such as Mercury Marine engines. Polaris (PII) has exposure through Bennington pontoons.
Even companies making marine coatings, parts, trailers, and accessories benefit from the same healthy ecosystem.
Because once people get into boating, the spending doesn’t stop. Ever.
That’s the whole business model.
Sitting there on the lake with the kids flying around behind the boat while I’m mentally calculating how many thousands I’ve already broken out this summer, I started laughing.
Maybe the boating guys had it figured out all along.
If you can’t avoid the racket, you might as well own the stocks.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs