Winter and Thanksgiving are upon us. It’s a spendy time of the year for the entire world. Black Friday on this side of the world, and Singles Day in the most populous country in the world.

In the Bay Area, daily highs this time a year hang out around the 50’s and 60’s with lows in the 40’s to ’30s. More than cold enough for this Californian to warrant the use of my fireplace. Usually, winter holidays mean getting together with family. Not in 2020. This year I’ll be smoking a turkey for just the wife and kids. No eating turkey at my sister-in-law’s house like we’d normally do. No midnight Christmas eve partying at an uncle’s house either.

Having kids has upped the fun level at our house around the holidays. December 1st now marks the arrival of our daughters’ elves “Sparkles” and “Poop” (I don’t choose the names and my 3-year-old is set on naming her elf Poop).

Elf on the Shelf wasn’t a thing when I was growing up. For those that don’t know, overnight these elves get into trouble somewhere around the house. And it’s up to my daughters to find them in the morning when they wake. The elves report to Santa on whether the girls are behaving or not, so the kids are on their best behavior around this time of year too. Which kinda makes up for the stress of trying to find 25 creative activities for the elves to get into each December.

Black Friday. El Buen Fin. Singles Day.

This time of year also marks the beginning of the great spending surge in our society. Black Friday is just a few days away. Singles Day just happened in China—where Ali Baba and JD.com had a record $115 billion in combined sales. Mexico even has a consumer day called El Buen Fin and in 2019 had MXN $118 billion in sales.

These next few months all across the world, stores, restaurants, theaters, and their parking lots should be packed with eager spenders from now till New Years’.

I’ve always loathed the ugly side of this consumer culture staple. Not because I’ve always been an anti-consumerist with a 50% savings rate (I’m a Recovering Consumerist after all), but because of the frenzied crowds, increased traffic, and what I see as unfettered gluttony. There’s no shame in their game.

The Salmon Run

I’ve come to realize that this spending surge is needed. Our economy hinges on loads of money being spent in the last two months of the year.

Holiday Season spending is like the Salmon Run upriver each year…I’ll dub it the Consumer Run. Mature Salmon head off to spawn in freshwater rivers and then die en masse. Consumers head off to spend and let their savings rate due en masse.

The salmon is a keystone species in the northwest, meaning that salmon impact a vast array of life other than themselves. Animals, like bears, and forest flora depend on the Salmon Run to survive. It’s the death of the salmon that keeps everything going. Keystone species are described as playing a critical role in maintaining the structure in an ecological community.

The holiday Consumer is also a keystone species, but instead of supporting an ecosystem, the holiday Consumer maintains our Economic System.

Our economic system has become dependent on the Consumer species, especially during the holiday season. The hungry grizzly bears in this environment are retailers.

But we gotta spend…Black Friday, Singles Day…

As much as we may cringe at the excess spent during the holiday season, even judge from our high savings rate horses, it’s necessary that it happens. And I would even argue we shouldn’t hesitate to join in the spending, in moderation of course.

The bigger the holiday Consumer Run, the better our stock market returns will look. If everyone maintained 50% savings rates we’d likely fall into the Paradox of Thrift.

• 2019 saw 192 million American online shoppers from Thanksgiving through Cyber Monday and spend $7.4 billion on sales. 84.2 million shoppers physically went to the store on Black Friday. (Source:Blackfriday.com) *Compare our $7.4 billion BF sales to China’s $115 Singles Day sales!! Yikes! BABA and JD are some of the small number of individual stocks I own.
• $729.1 billion total holiday sales in 2019 for Nov and Dec only!
• 19% of total annual retail revenue is generated during the months of November and December. (Source:NRF)

Holiday shopping supports the economy (and our investments)

In 2020, spending is needed more than ever. Yes, big retailers will benefit from e-commerce. Great. But a vast portion of auxiliary businesses will be adversely impacted by Consumers not being out to physically shop. These are restaurants, gas stations, parking lots, and small businesses that spenders carelessly splurge on when they are out shopping en masse.

In recent years Small Business Saturday has taken hold, but how will 2020 treat these small businesses? It will take greater effort to support these small businesses than ever before. Especially with the prospect of a needed government bailout not looking too good right now.

Almost there

2020 has been a rough year, and it appears like we’re heading into deeper waters this winter with the shocking rise in covid cases worldwide. But it’s looking like a light has appeared at the end of this coronavirus tunnel. A vaccine is on the brink, and the sooner we all can get this shot, the sooner we can throw away these damn masks for good.

If holiday shopping is part of our routine, let’s do our part and support those businesses that depend on the Consumer Run…if it can be done safely and socially distanced. Small businesses in particular need our help this year.

What’s your plan for this holiday shopping season? Are small businesses on the agenda? What’s your favorite way to cook the bird?