by William Smead, Smead Capital Management

Major magazines have a history of putting a topic on their cover at the end of a long-term trend. For example, “The Death of Equities” was a Business Week cover in late 1979, near the end of a miserable stretch in the US stock market. Time’s recent cover story, “The Childfree Life”, got us wondering about the economics of childbearing in the US? Does Time’s cover mark the end of a trend? Can the US economy succeed without homegrown population increases? Will economic success driven by the current demographics in the US trickle down to unemployed blue collar workers? What does this cover, “The Childfree Life”, mean to investors in the US stock market?

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We will argue in this missive that demographic trends, difficult economic times and an emphasis on college education have temporarily interrupted childbearing, as Americans adjusted to the existing culture. The timing of when one marries and has children is markedly different today than it was 30 years ago. Today, women get married at an average of 26.9 years old and men marry at an average of 28.7. In 1980, it was 24.7 for males and 22.0 for females.

Here is what Time’s writer, Lauren Sandler, wrote in her recent cover piece:

The birthrate in the U.S. is the lowest in recorded American history. From 2007 to 2011, the most recent year for which there’s data, the fertility rate declined 9%. A 2010 Pew Research report showed that childlessness has risen across all racial and ethnic groups, adding up to about 1 in 5 American women who end their childbearing years maternity-free, compared with 1 in 10 in the 1970s.

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About the author

William Smead

Chief Executive Officer/Chief Investment Officer

Whitman College, B.A. Economics 1980

William is the founder of Smead Capital Management, where he oversees all activities of the firm. As Chief Investment Officer, he is the final decision-maker for all investment and portfolio decisions as well as reviewing the implementation of those decisions in the firm’s separate accounts and mutual funds.

William began his career in the investment business with Drexel Burnham Lambert in 1980. He left Drexel Burham Lambert in 1989 as First Vice President/Assistant Manager and joined Oppenheimer & Co., where he stayed until joining Smith Barney in 1990. William remained at Smith Barney until September 2001 when he joined Wachovia Securities becoming the Managing Director/Portfolio Manager of Smead Investment Group of Wachovia Securities. In 2007, William left Wachovia Securities to found Smead Capital Management.

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