Recession Proof Industry Gains 27% in 2008
When the economy falls, the demand for escapist entertainment rises. History has proven this over and over again. During “The Great Depression” (1929 – 1939) 25% of American families had no income and 40% of factory workers were unemployed. In 1930 there were 200,000 evictions in New York City alone.
Despite this, movie box office receipts during the 1930s soared 22%. In many cases people elected to see a movie, rather than eat. That’s how desperately North Americans needed to escape (mentally) from the weight of their problems.
And if you think things are different now, think again.
In 2002, after the technology bubble burst, the Dow Jones Industrial Average dropped 22%. Meanwhile video gaming revenues increased 43% to $7 billion.
Yes, the “Escapism Industry” has fractured. Now there are many different (drug-free) ways you can purchase a ticket to a parallel universe. The surging growth of escapist activities has created opportunities for investors.
TV is probably the cheapest option, but I would argue that it is also the least effective. If you can manage to bypass CNN and Fox News (reminding you how bad things are) and reality TV (a festival for ambitious dimwits) you are likely to land on a “quirky comedy” with fake laughter piped in to remind you it’s funny.
If you want to get distracted and find some bear market winners for your portfolio, you’ll have to wander away from the TV.
In recent weeks I’ve been writing about tech companies that thrive during economic downturns. There’s a big opportunities in tech companies that help their customers to cut costs (Tech Stocks Provide Safe Haven). Times are tough and corporations are going into survival mode.
But of course businesses are not the only ones watching their pennies.
