BECKY Busts → Deskchair de Gama

Hey Neighbor. The number of holiday shoppers who intend to “self-gift,” which sounds grosser than it is, has inexplicably fallen 16% YoY according to new Deloitte shopping surveys. We say buck the trend. Buy those Kragg Arc’teryx slip-ons. Who knows you better than you?

If you’d rather not receive this newsletter, click here.

If you’d like a friend to receive this letter so they are less boring, click here.

If we were at a cocktail party, you might hear me say the following....

The number of people who have a negative view of grocery stores is up roughly 35% over the last four years. For three of those years, margins contracted as prices rose. Crazy tough business. Be nice to cashiers. [1]

I might also try to talk about....

→ Disney starts testing the “Lightning Lane Premier Pass” tomorrow. The $400 pass allows visitors to skip lines. Know the awkwardness of humping a carry-on through first class while someone with a plastic fistful of crap merlot watches? Know the feeling of being the person with the merlot? Well, those are both Disney experiences now. (READ MORE)

→ Kamala Harris is admonishing Trump for swearing while trying to win over non-college educated voters. Bizarre choice. Psychological and linguistic studies suggest swearing is associated with the working class and with honesty (also, correlated to a larger overall vocabulary). Maybe cut the fucking respectability bullshit? (READ MORE)

→ Wolfsburg, the second richest metro in Germany, is in crisis. Half the city’s residents work for VW and the carmaker is struggling. There’s genuine concern that a haus on Dorfstrasse could wind up next to worthless if layoffs continue. The city’s predicament holds a funhouse mirror (not that fun, it was created as a Nazi central planning project) up to the one faced by Seattle, where Amazon Web Services is laying off hundreds. Cities heavily dependent on one company tend to get wealthier faster, but anything that booms can bust. (READ MORE)

It’s harder to segment the population by habits (commuting, spending, leisure-ing) than by traits (geography, race, lactose intolerance) and harder still to segment by daydreams. But non-experiences – portable, recurring – may be a better way to understand the Upper Middle than all those CSVs of population data.

In our Q3 reader survey, we asked readers about their daydreams. Exactly zero reported fantasies about professional achievement, 11.8% of respondents (there were 127 overall) reported fantasies about money (expressed as “stability,” “no debt,” or “freedom”), and 12.6% reported fantasies about relationships (expressed largely in terms of “sex” or “partnership”). More than 52% daydreamed about some form of travel.

Why do more members of the Upper Middle fantasize about travel than spending more time on fulfilling non-travel activities (16%). No one answer suffices, so let’s entertain a bunch:

• Travel is a lifelong, trackable project ostensibly focused on personal enrichment.

• Travel is a way to enjoy leisure time while minimizing obligation or distraction.

• Travel is a hobby protected (at least to some degree) by corporate calendars.

• Travel is a near complete abandonment of domestic labor.

• Travel is a means of self-expression via consumption.

Mileage on each of those explanations presumably varies by traveler, but the critical thing is this: Folks with nice houses – the median reader of this newsletter has a net worth north of $1.35M and $500K+ in home equity – don’t want to occupy them. And they aren’t circumspect about. Here are responses to a prompt asking where people would like to spend more of their money.

How people would like to spend their money tells us less about who they are than how they actually do spend their money. But the devil is is in the juxtaposition. The coupling of high home expenditures with the desire to be elsewhere is particular to the Upper Middle. Where less privileged people report wanting more “vacation,” a concept that implies a return flight[2] and wealthy people work from bridge deck, Upper Middlers invest like homebodies and think like pilgrims.

Here’s a breakdown of regular expenditures.

So, what defines the Upper Middle? Is it the paycheck? The mortgage? Sure, that’s a big part of it. But it’s also daydreams. Florence in the spring. Bangkok in the winter. Uluru in Kambarang. All those fantasies – those non-experiences – add up into one big experience that shapes us far more than any given trip. That’s the experience we share.

→ John Derian’s Target collaboration is terrific. Great pillows and fun candles. Nice to see the Target collab team return to form after the Rowing Blazers debacle and bullseye the zeitgeist just as “Whimsigoth” dethrones “dark academia” as the interior design meme du jour. (CHECK IT OUT)

→ The Times wrote a glowing profile of Costco Connection, calling it “the nation’s third largest magazine by print circulation.” Connection definitely has reach – Costco has 32.3 million “Executive Members” – but it’s a stretch to call it a magazine. The circulation is totally decoupled from the content. Also, putting the Time’s weirdly sycophantic pseudo-populism aside, it’s hilariously unreadable. Here’s a recent excerpt from a profile of Jessica Simpson: “One of the biggest lessons this preacher’s daughter from Abilene, Texas, has learned is that things don’t always have to be expensive to provide comfort. It’s one of the reasons she loves shopping at Costco. (“I’m obsessed with Costco sheets!” she says.)” [3] (READ MORE)

 → Since its parent company, Amer Sports, went public in February, Arc’teryx has been doing anything and everything to steal market share from its gorpcore rivals: Salomon, Patagucci, and Nike ACG. That’s starting to look more plausible thanks to the Kragg shoe, a slip-on mocca-sneaker perfect for travelers that has (we’re told) been flying off the shelves of the brand’s new Manhattan flagship. (Read More, Scope the Shoes)

In 2009, Michael Silverstein and Kate Sayre, consultants and partners at Boston Consulting Group made a career-defining claim in the sweat-stained pages of the recession-era Harvard Business Review: “Women now drive the world economy.” It was a provocation targeted at old schoolers still counting the subprime mortgages stuffed in the inside breast pockets of their Brooks Brothers hopsack blazers. The real point was that women control the bulk of consumer spending. And not 51%.

At the time, Silverstein and Sayre put the number at 73%.

Consultants gonna consult so Silverstein and Sayre broke down female consumers in six categories: Fast-tracker, Pressure cooker, Relationship focused, Managing on her own, Fulfilled empty nester, and Making ends meet. Of these, the “fast-tracker,” an economically liberated Upper Middle lady in a hurry, represented the big opportunity. At some point, someone – it’s not readily clear who because… Reddit – named this woman Becky and created the $BECKY ETF.

$BECKY is not a real, listed ETF. (Michael Lewis gets this wrong in Going Infinite, which is unlike him so we’ll let it go this once.) $BECKY is an investment hypothesis wrapped in a thought experiment: A person can bet on the economic might of professional women by investing in specific companies catering to their desires and needs: Apple, Coty Inc, Decker's Outdoor Corp (Uggs), Diageo, Estee Lauder, Etsy, LB (Victoria's Secret), L'Oreal, LuluLemon, LVMH, National Beverage (LaCroix), Netflix, Nike, Planet Fitness, Snapchat, Starbucks, Target, Tiffany & Co, Ulta Beauty inc, Under Armour, VF Corp. (Google Sheet for the dweebs.)

After the Silverstein and Sayre article was published, $BECKY overperformed the market, 10xing “investors” investments by 2021. Since then, $BECKY has crashed the X3. $BECKY has now underperformed the market since 2009 [3]. That said, you can’t keep a good girl down. Time to update the stock list.

- Upper Middle will be rolling out an $UPPERMIDDLE ETF inspired by $BECKY next week. We salute our foremother and appreciate her driving us to soccer.

→ America is all in on townhouses. Townhome starts are way up as “middle density” projects kick off in a lot of suburbs where single-family homes have gotten out of reach for the Lower Upper Middle. Some 62% of U.S. housing is low density, a lot higher than in most countries and definitely one cause of the house crunch. (READ MORE)

→ People who use generative AI in their day-to-day work are roughly 20% more likely than gen pop to believe that economic inequality will become more extreme in the future. The AI user base skews male and educated, but is not heavily distorted along racial lines (though, interestingly, black men are overrepresented). (Read More)

→ Uber-wealthy philanthropists remain bad at math. There’s no evidence that tuition-free medical schools turn out more primary-care physicians – America will have a deficit of 86,000 by 2036 – than other schools. Yes, a no-tuition medical education saves docs money, but saving $500K (on the high side) doesn’t make them more likely to take roles that pay $200K less every year forever. Feels like Bloomberg could have done that math on the back of a Jean-Georges napkin before giving Johns Hopkins a bil. (READ MORE)

NOTES & FOOTNOTES

[1] If you’re the sort of person that is rude to cashiers, please unsubscribe from this newsletter and go fuck yourself.

[2] Not a single response to the Upper Middle survey contained the word “vacation.” “Sailing.” “Rock Climbing.” “France.” “Sex.” No “vacation.” The difference between the number of people who want to spend more on travel than adventure suggests that members of the Upper Middle have some chill. But not much.

[3] On the plus side, the Costco Connection paper stock burns way better than the Paris Review. So there’s that.

[4] Despite having Apple exposure, $BECKY is light on tech. That’s a big part of the problem and reflects a reality around the marketing of tech products (and the rise of SaaS): It’s not so easy to caricature the end-buyer.