ConvergEx Group's Nick Colas took on a study that went back a few decades, but his findings are comparably cosmic.
By using a 45-year old Christmas catalog from Sears & Roebuck (SHLD) as his control group, Colas has unearthed a bevy of findings from 1969 that speak volumes about the current state of fashion, consumer demand, gift-giving, and price.
As we discuss in the attached video, the "Wish Book" of yore is the equivalent of Amazon (AMZN) today. While most gifts look nostalgic and seem incredibly cheap compared to today, others look down right pricey.
For example, Colas points to what then was a pretty sweet 23-inch color console TV that sold $729 in 1969 -- the same year Neil Armstrong and Buzz Aldrin first walked on the moon!
“That struck me as odd,” Colas says, “because that was a lot of money back in 1969.”
By comparison, he says a nice, flat panel TV of the same size can be had today for about one-quarter that price, or just $177. And that’s at time when the dollar’s buying power has shrunk by close to 300%!
If you adjust for inflation, he says, that cost of that late-60’s TV would likely buy you over four grand of digital delightfulness today, a.k.a. an 80-inch screen with a sick audio package as well.
In fact, unlike the vast majority of goods and services that have risen in price by an estimated 273% over the past 44 years, TVs have come down by 96% --- and even then, Colas says, that’s only from the early ‘80s when the government last ‘’quality adjusted’’ its calibration of TV pricing.
On the flip side, a lot of the classic Christmas gifts have gone up by that official inflation amount, Colas says. Whether you’re talking about snazzy “high-waisted, polyester bell bottoms” for Dad, or an oh-so-sumptuous plaid tunic and pants set for mom, Colas says clothes are one category that has gone up by the official 270%.
“Clothes and toys are up,” he says “but electronics and TVs are actually down, and down tremendously."
Finally, he says, certain must-have gifts have stayed pretty much constant through the years, and will hit you up for about the same amount today as they did back then.
"That's the most interesting thing about the study," Colas says, pointing out that a spiffy cassette player sold for about $30 to $50 in the '69 catalog, while an MP3 player can be had for exactly the same amount today; a significant savings when you consider that $30 in 1969 is worth $190 today.
Perhaps the big take-away here is the science that goes into calculating inflation, and the vaguaries that make the numbers somewhat unreliable. Colas says a key example of this is the fact that TV’s weren’t added to the CPI mix until 1978, and “personal computers” did not become their own cost category until 2005.