Be careful with recession-proof investments.
To get them right, you need to time the markets correctly… which is – unless you have a proven system such as my 18.6-year real estate cycle – very hard, if not impossible.
During the pandemic, restaurants were shut down. People started ordering food for delivery.
And even when bars and restaurants reopened, the demand for services such as Uber Eats and DoorDash continued soaring.
I get it. It’s hard to beat the convenience of your dinner showing up on your doorstep, even though it’s slightly colder and soggier than it would be if you went to the restaurant itself.
Delivery services seemed like a nice recession-proof investment. If people can’t go out because their budgets are tight, they will at least get food delivered out of habit and convenience. Plus, you don’t need to either dress up or drive.
But… turns out, people continue enjoying their meals at brick-and-mortar restaurants… and they do it in massive numbers.
(As I said before everybody else, there’s no recession.)
Investors who bet against the leisure sector aren’t doing so well… and here’s the latest example.
Ghost Kitchen Startups Suffer
Ghost kitchens are food production facilities. They make food for one or more restaurants. When you order food through an app, it may actually be prepared at a ghost kitchen, and you would never know.
They were all the rage during and after the pandemic.
But now that millions of people starved of in-person leisure and entertainment are back and willing to spend, this business model is crumbling.
CloudKitchens, which is the brainchild of Travis Kalanick who co-founded Uber, has reportedly been slashing its workforce and closing some of its unmarked food preparation warehouses.
No wonder. Not only have higher interest rates made running a cash-burning startup harder recently… but people just seem to like visiting restaurants more.
In 2022, food service and drinking place sales in the United States reached a record $976 billion, 50% higher than in 2020.
And this trend continues even in 2023… despite inflation… and despite the fact that every media outlet has been telling you that higher interest rates have destroyed the American consumer.
And this is exactly what I would have told you if you asked me back in 2020 what would happen to the leisure and entertainment sector after the pandemic.
How I Forecast the Markets
My 18.6-year real estate cycle told me that we would get a mid-cycle slowdown in 2020… and that the economy wouldn’t peak until 2025-2026.
So it wouldn’t make too much sense to invest in something that works best when the economy is shut down… like ghost kitchens.
The world is currently headed into the final, frenzied stage of the real estate cycle. It’s the part that I’ve been calling the “Eleventh Hour”… in which growth accelerates… people travel, go out for food and drinks, access ever more credit, and keep spending.
But there are several moves you need to take and be aware of in order to grow and protect your wealth during this stage.
If you want to know more about how I forecast so accurately… you should check out my briefing on Saturday, September 9 at 11AM ET.
I’m calling it the “Gann Money Almanac Summit.”
During my briefing, I’ll go into more details about my system than I ever have before.
It’s the system that allowed me to call every move in the markets – up and down – for more than 30 years.
That includes calling the:
Global downturn of the early 1990s
1990s bull market
2003-2007 bull market
2008 global financial crisis
2009-2019 bull market
October bottom in 2022
Bull year in 2023 – including March bottom
And now, I’ve dedicated myself to sharing that knowledge. You may be surprised by what you see, but you’ll also be prepared for what’s to come.
You can reserve your slot immediately right here.
And as always, if you have any questions, write to me at [email protected].
Editor, Cycles Trading with Phil Anderson
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