I look at charts and study markets all day, every day.
I’ve been doing this for decades. It’s what I do, and I don’t really know a different world.
The Cheesecake Factory? That’s a different story.
I remember going with friends and girlfriends back in high school, but I haven’t been in high school since the ’90s.
Apparently, I had some catching up to do.
On Monday, my wife decided our kids needed more clothes. If you saw their closets, you might disagree with that thesis.
But nobody asked us, so off to the mall they went after school.
We have twin boys and a six-year-old daughter. The plan was simple: They’d shop, I’d finish work, and we’d meet at the Cheesecake Factory for dinner.
My first challenge was finding a parking spot. The mall was slammed on a Monday afternoon in October.
I wasn’t thinking much about it while driving around looking for somewhere to put the car. Looking back, that was probably my first clue.
I got to the restaurant before everybody else and hung out in the waiting area. The place was clean, looked nice, and felt a lot fancier than I remembered. I was impressed.
Once we sat down, there was bread on the table. Different kinds, too. The kids got to work immediately.
Parents, you know what I mean. Little kids don’t sit down at a restaurant and quietly reflect on their day while the kitchen gets ready.
They need food, and they need it now. Whoever figured out the bread situation understands the assignment.
Then I opened the menu. Holy cow.
You could finish dinner before you finished reading this thing.
When in Doubt, Order Champagne
They’ve got lettuce wraps, Cuban sandwiches, burgers, chicken, and more cheesecakes than I knew existed.
My market brain immediately wondered how you keep costs under control while making that many different things.
My dad brain was just happy everyone could find something to eat.
But first I needed a drink. My wife likes beer, and I’m more of a wine guy.
Most of what caught my eye on the wine list was American, especially California, and I tend to prefer European wines.
Give me a Bordeaux or a Burgundy and we can talk. American Pinot Noir? You guys can have mine.
Fortunately, being a certified sommelier comes with a few useful tricks.
One of my favorites is that when you don’t know what to order, Champagne is a pretty good place to start.
It goes with all kinds of food, which helps when you’re still working your way through a menu the size of a school textbook.
They had half bottles of Veuve Clicquot. Perfect. A couple of glasses of cold Champagne, and we’re in business.
Next thing I know, the kids are stuffing their faces with bread, I’m drinking Champagne at the Cheesecake Factory, and I’m telling my wife how great this place is.
She’s looking at me like I’ve just discovered something everyone else already knew.
The food was good, too. I had lettuce wraps, some chicken, and a little of my kids’ burger.
That’s part of being a dad. You order your own dinner and then conduct quality control on everyone else’s.
The service was great, and the place was clean. Most importantly, the kids were happy.
The kids are happy, my wife’s happy, and I’ve got Champagne.
That’s a pretty good Monday.
Somebody Forgot To Tell the Customers
Now let’s look at the stock.
Cheesecake Factory trades under the symbol CAKE, because apparently even its stock symbol comes with dessert.
The shares have been trading near their recent highs, which gives me another reason to pay attention.
I mentioned the stock to my wife while we were talking about dinner.
Her response was basically, “Yeah, I can see why.” She didn’t need to study a chart to understand why people would come back.
Then I talked to my buddy Jeff Macke, who studies consumers and the companies they spend money with.
I wanted to know what Cheesecake Factory was doing that was so special. His answer was that I was making this too complicated.
His point was simple: People are spending money.
Give them a clean restaurant, good service, decent food, and a place they want to bring their family, and they’ll show up.
In Jeff’s view, the consumer is healthier than the doom crowd wants to believe.
When market people say “the consumer,” they mean people buying things. Families buying clothes, ordering burgers, and letting the kids pick a cheesecake.
On Monday, I got to watch some of that spending happen while doing a little myself.
Does one family dinner tell us how every household in America is doing? Of course it doesn’t.
But a crowded mall, happy customers, and a strong stock deserve a place in the conversation, too.
I spend my days looking at what people do with their money. Sometimes, that means studying a chart on a screen.
Sometimes, it means noticing that finding a parking spot at the mall is a pain on a Monday afternoon.
That’s the fun part about paying attention.
You can learn something while doing the most ordinary things, even when your only plan was to meet your family for dinner.
You just have to leave a little room for what you see to change what you think.
If you’re convinced everybody’s broke and nobody’s spending money, go to the Cheesecake Factory.
Go look around, have dinner, see what’s happening. Then call me and tell me the consumer is dead.
This is real boots-on-the-ground research, guys, JC drinking Champagne at the Cheesecake Factory.
It’s real life, and I’m happy to do my part.
This Week in Everybody’s Wrong
On Monday, we opened the week by asking some simple questions.
If everybody benefits from AI, is everything an AI stock? Or does that mean nothing is really an AI stock?
On Tuesday, we reflected on the fact that the stock market for the world’s 10th-largest economy fell more than 25% before the opening bell at the New York Stock Exchange on Monday.
Meanwhile, the Nasdaq was up more than 1%, the Dow was higher, and European stocks were rising.
Here’s how watching what fails to make markets fall can teach us something, too.
On Wednesday, we talked about how AI might pose “catastrophic or existential risks” for all of us, not just investors, traders, and speculators.
If we’re all gone, getting renewals to subscriptions for AI models is going to be a real challenge.
Indeed, the end of humanity could be bad for business.
On Thursday, we wondered how companies are going to sell $700 billion worth of stock this year.
Who’s going to buy all that?
Is the market going to be able to handle it?
On Friday, we checked in on one of the biggest companies on the planet.
Apple sells things to consumers, and AAPL is near the highest price anyone has ever paid for it.
That’s probably a powerful and positive force for the market.
On Saturday, Sam Gatlin broke down a trade that literally saves lives.
AI is already helping doctors detect diseases earlier.
And a major healthcare industry is breaking out of a massive base.
Have a great Sunday.
We’ll see you Monday morning…