The Dad Bod is arguably the hottest “trend” — if you want to call it that — of 2015. Personally, I don’t consider it a trend; I consider it a thing that people have opinions about, mostly because of the Internet. The large majority of America probably doesn’t care about the Dad Bod, no matter how much the media jams it down everyone’s throats.
But how to financial markets react to viral “trends” like the dad bod? According to Jim Grant, a market forecaster who publishes Interest Rate Observer, not favorable for athletic apparel companies that emphasize personal fitness and athletic performance like Under Armor. Here’s an excerpt that ValueWalk’s Jacob Wolinsky tweeted from a new report earlier this morning, via Business Insider:
Trends seemingly come out of nowhere. Who can account for it? A UA short seller advises Lorenz that the “sneakerhead” market (an eBay-hosted emporium of athletic footwear) has “rolled over.” A Clemson University student named Mackenzie Pearson writing in the Clemson Odyssey, coined the term “dad bod” and started a national celebration of the kind of guy who’s not scared of a cheat meal, because he eats just about anything and everything.” The untoned “dad body” is not Plank’s core demographic.
With a $17.4 billion market cap, UA is a large, liquid stock. With a short interest of 7.8% of the float, it is not a crowded short. The insiders are selling $87.4 million’s worth of stock at an average price of $76.23 in the year to date. Why shouldn’t you?
LOL who taught Jim Grant about the dadbod? pic.twitter.com/FdMkeaKOZg
— Jacob Wolinsky (@JacobWolinsky) June 11, 2015
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I don’t know ANYTHING about stock forcasting, but this seems a little silly. The Dad Bod may have enjoyed its time in the sun as a Facebook phenoneom, but people aren’t going to stop buying sneakers or gym shorts this summer just because sitting on the couch with a tub of Ben and Jerrys is suddenly cool. Fundamental human behavior and how that translates into economics probably isn’t dictated by people sharing a post written by a 19-year-old girl at Clemson that got a couple of chuckles.
Then again, if this turns out to be legit and you’re an Under Armor shareholder, how pissed are you that this guy is going to cause your stock to go down:
https://www.instagram.com/p/29tvHPpaWd/Or this guy:
https://www.instagram.com/p/24UwQeJadV/Or this guy:
https://www.instagram.com/p/26abwYpaVW/Awk-ward.
For every ying, there’s a yang. If athletic apparel stocks are bad because of the Dad Bod, that means stocks in Taco Bell and Miller-Coors will soon be soaring, right?
[H/T: Business Insider]