Listen to the full episode, here.
John Norris (00:30):
Well, hello again everybody. This is John Norris at Trading Perspectives. As always, we have my good friend, Sam Clement. Sam, say hello,
(00:36):
John. How are you doing,
(00:37):
Sam, I’m doing pretty well. I’m doing pretty well. Thank you for asking. Now, last night I missed out on a wonderful opportunity.
Sam Clement (00:42):
What was that?
John Norris (00:43):
Well, buddy of mine named David texted me sort of late in the day and asked me if I wanted his tickets to go see a concert. A group here in town was playing over at the Avondale Brewery, and the name of the group was The Violent Femmes. Ever heard of the Violent Femmes?
Sam Clement (00:55):
I can’t say I have.
John Norris (00:57):
Alright. It grew from the early to mid-1980s. Were popular at the time and you know something free tickets are free tickets. But I turned them down, however, tickets that I didn’t turn down, but tickets that I actually paid about 75 bucks for – decent seats at the Alabama Theater down in downtown Birmingham. I’m going go see Morrisey. Do you know who Morrisey is?
Sam Clement (01:16):
Sounds a little more familiar.
John Norris (01:18):
Well, I tell you, he was the lead singer of a group called The Smiths, which was real popular during the 1980s, and he’s gone on to have a pretty decent solo career. I tell you all this type of stuff because it doesn’t seem like that long ago I wasn’t spending anywhere near the amount of money people are asking for concert tickets. I mean, sporting events, all of these ways to entertain ourselves have just gone through the roof.
Sam Clement (01:46):
Well, and it’s not that surprising in the scheme of things when you’re talking about inflation and just prices as a whole have gone up, really starting since Covid. I mean, especially the last two years really is where we’ve seen the official inflation data take off. So that portion of it isn’t surprising what’s I guess…
John Norris (02:03):
But can inflation alone count for all of it?
Sam Clement (02:06):
No, and that’s what I’m getting at is that, so you have that piece of it, everything’s gone up in prices, but other items, like we’ve talked about, eggs and butter and milk and what have you, bread is more expensive, but you’re not getting that, “oh my gosh,” as much as you are, and part of it is just the absolute values of this, but concert tickets for nosebleeds, the top concerts in Birmingham, nosebleed tickets are several hundred dollars. And sporting event tickets, I mean these so-so games you used to be able to almost buy tickets for 10 bucks, 20 bucks, just something to get into the stadium, now $50 or $100 at least and it’s crazy.
John Norris (02:50):
And then if you go to a reseller like StubHub, I mean it’s anyone’s best guess what you’re going to get.
(02:55):
And so when I’m sitting around taking a look at things, I just harken back to: Sam back in the day, I’ve already mentioned talking about turning down tickets to go see a group called The Violent Femmes and going to go see Morrisey when he comes here in town. Looking forward to that. But I’m so old, my God, I’m old, Sam. Just kills me. I remember that Birmingham used to get all kinds of awesome concerts coming in through town. This was back in the day when groups or singers, performers, what have you, toured to support the album.
Sam Clement (03:29):
The albums were where the money came from.
John Norris (03:29):
The albums are where the money was easily where the money came from. And one of the best concerts I saw growing up, believe it or not, was 10 bucks, which even back in the day was a pretty decent price for decent entertainment. Maybe it was five. It was cheap to go hear a guy named Eddie Money play at the Oak Mountain Amphitheater. Ever heard of Eddie Money? I wasn’t expecting too much out of Eddie and apparently not a lot of other people were either because that thing seats, what about 12, 13,000?
Sam Clement (04:01):
I’ve actually never been to the Oak Mountain Amphitheater.
John Norris (04:03):
Oh really? Okay.
Sam Clement (04:04):
Well it’s closing now and I can’t go anymore.
John Norris (04:06):
And so let’s say it seats 12,000. There was maybe 5,000 people there that night. Apparently a lot of other people were thinking the same thing I did. Paid five, $10 for general admission. And Eddie apparently wanted to play and said, alright, everyone in the grass – there was a grass seating lawn back then – and Eddie said, come on down to the front ushers, let them down. And he went on to play one hell of a show. Now I tell you that because I’m no big fan of Eddie Money. I mean, that’s the only thing he’s ever made money on me. He’s dead now, by the way. But the thing about it is that was a legitimate thing to do for the night. Kind of last minute, I’m going to go see a concert and this guy’s a pretty big star. I mean, he is not in the Rock n Roll Hall of Fame, but too big for a Bar mitzvah, not big enough to get on American Bandstand, that sort of type guy. And we went there because it was legitimate. Now you tell me how many people are just going, you know what, I think I’m going to go see Taylor Swift tonight.
Sam Clement (05:00):
Yeah, you have all these different forces working at once. I mean, we’ve talked about this with sporting events, less people may be going to some, more people going to others and focus is on smaller venues,
John Norris (05:13):
Still dumbfounded …
Sam Clement (05:14):
One of these forces is that, exactly like you mentioned, the concerts are big money drivers. It’s less about selling the album, now.
John Norris (05:25):
Do they even sell albums now?
Sam Clement (05:27):
And you don’t make much money comparatively off streaming. And so you have to focus on that and the profit around that largely.
John Norris (05:36):
And boy, haven’t they?
Sam Clement (05:37):
And then we’re in a market where you’re not getting as many big artists. And when you are, everybody wants to go to the big artist.
(05:48):
I mean, you’re not getting a Taylor Swift in Birmingham.
John Norris (05:52):
Ok, but why would she come to Birmingham, which a nice size metropolitan area, about the same size as Buffalo, believe it or not, for people listening here.
Sam Clement (05:58):
But we don’t have an NFL stadium.
John Norris (05:59):
We don’t have an NFL stadium. And also, why should she do that when she can play three, four nights in Atlanta, have people from Birmingham, Huntsville, Greenville, maybe even Columbia, Macon, all these people will travel a couple hours to go see this.
Sam Clement (06:14):
Oh yeah, people fly across the country.
John Norris (06:16):
So she can get a whole bunch of geographic areas or population centers just by playing several nights in a bigger city. She did that with Nashville. I think she played a couple shows there. And so that’s the sort of thing that’s happening. It’s a real shame because Birmingham’s a big enough city where the major acts would come through town. I mean, seriously. And now it’s, I’d say we rarely get the A-acts, but we get maybe the B?
Sam Clement (06:43):
Yeah, sometimes A-acts with country, more so.
John Norris (06:43):
Sometimes they’ll show up. But Beyonce didn’t come through here. Taylor Swift didn’t come through. Coldplay hadn’t played here since 2008,
(06:53):
That sort of type thing. So I go through all of this and not really to talk about Birmingham and its concert past, although we’re halfway done and that’s all we’ve talked about. It’s really just, it’s kind of a disconnect we’ve talked about, here and then also in the newsletter about the disconnect American people have between the stated official economic data, which is pretty good and what they think their personal experience is, which seems to be pretty poor. And so they tout things like the eggs you were mentioning at the grocery store, how expensive they are, milk, all these things. “I remember when you get a hundred dollars worth of groceries andit was like a thousand bags,” that sort of type deal, now it’s like it’s just one little plastic bag. People will complain and bitch about having to spend that much money on these sorts of things. But then, hey buddy Taylor Swift’s coming to town.
Sam Clement (07:47):
Thousands.
John Norris (07:47):
You ready to drop a couple of G??
(07:51):
I’m so hip hop (laughs) and then also sporting events.
(07:55):
No matter how big my television is, no matter how clear, crystal clear, say nothing but the best. I mean 65-, 75-inch televisions, you can almost get life-size sort of type deal and sit in the comfort of your own home in the air conditioning. And yet, on any given Saturday here in the state of Alabama, a hundred, 105,000 people in Bryant-Denny, I think it’s officially 101,800, something like that, down in Bryant-Denny, which is the home stadium for the University of Alabama Crimson Tide and 85 to 88,000 down at Auburn, down at Jordan-Hare Stadium. That’s not even the stadiums down in Troy, Mobile, Jacksonville, even here in Birmingham. And people are willing to spend top dollar on this. The price, the prices on the tickets themselves are so much more expensive than what they used to be. And then for big games like an SEC game for Alabama versus LSU or Auburn versus Georgia, one of those type things, Lord knows you’re spending hundreds of dollars on this.
(08:59):
I’ve got friends of mine that have season tickets to Alabama and they say that they pay for it, it costs an arm and a leg, and they make it all up just by selling one big game a year. They’ll always go to Auburn, but maybe they’ll sell Tennessee, maybe they’ll sell LSU and it pays for the remainder of the season. So again, I’m going through all this because what people were saying about, oh, the eggs are so expensive and how they’re really spending their money, the bigger ticket items, that’s a huge disconnect. People are spending money like crazy in order to go to these things. As is evidenced by Taylor Swift’s never ending Eras Tour. I mean, why should she end it? I mean periodically she goes to Kansas City on Sunday, but the rest of the time she’s traveling around the world making millions. What is this, a concert that lasts three years?
Sam Clement (09:47):
Well, I think the big part of it, and I mentioned all these different forces in this space, but the big one that’s defining all this is the change in consumption habits for Americans. And that we have not really seen that change a whole lot. I mean, whether it’s travel and the booming European vacation, which everyone seems to have gone on last summer. People are spending more and more and are fine stretching their budget more on these experiences. And that’s been the part that it’s had a lot of staying power in terms of what people are willing to do and where they’re willing to sacrifice. And it seems like they’re continuing to not be willing to sacrifice trips, concerts,
John Norris (10:39):
Sporting events,
Sam Clement (10:40):
Sporting events, what have you.
John Norris (10:41):
Going fly fishing. I mean just even, I mean upper tier golf courses, these types of things just seem to be groaning in popularity.
Sam Clement (10:52):
And that just seemingly has been a large shift in the consumption habits. And that’s been a big problem with some of the economic data we look at. There’s such a focus on manufacturing and some of these data points. Well, if we’re moving from a manufacturing-in-goods-heavy economy to a services-heavy economy, which we already are, we already have. But if that’s continuing…
John Norris (11:17):
If we go from services to experiences, what does that look like?
Sam Clement (11:20):
And how is that picked up in the data? And for a lot of it, it isn’t picked up. And so you get this disconnect in data, you get this disconnect in inflation because if this is what the government’s saying your average budget looks like, but hey, I’m willing to not eat out as much to go to this concert, go to this sporting event. How is that really picked up in it?
John Norris (11:41):
Well, I think you’re bringing up a good point, a great point. And it begs the questions: one, just how much does the BLS, the Bureau of Labor Statistics – which does the employment situation report, as well as the consumer price index – how much does it need to change its methodology on just about every major release that it does? And then second of all, okay, I hear what you’re saying. Changing consumption patterns from manufacturer goods, which we’ve got plenty of those now. Services, maybe even too much of that to experiences, arguably not enough… with each one, you have to wonder: what’s the true economic multiplier effect of someone playing golf relative to someone spending the same amount of money on a television.
Sam Clement (12:29):
You don’t have that, probably as much of that layer, you know if I’m buying something, that means someone’s getting the cash, they’re buying parts for it, what have you, and it goes down and down the line.
John Norris (12:39):
Yeah. So would you say that my spending a zillion dollars to go float down a lazy river has the same type of economic impact as my buying something tangible?
Sam Clement (12:50):
Probably not. And I think concerts and things of that nature probably fit into that boat at least somewhat. I mean, it’s probably in between buying goods and floating down the river. But if you’re going to a concert, okay, a large chunk of that’s going to the production company, they have some employees. Sure. I mean, I’m not saying it’s all just sitting in a bank account, but
John Norris (13:11):
It’s going to Taylor Swift, it’s going to…
Sam Clement (13:14):
Well, it’s
John Norris (13:15):
Well it’s not going to Eddie Money. You know why?
Sam Clement (13:17):
I think I know why, is it because he’s dead?
John Norris (13:19):
Yeah, that’s right.
Sam Clement (13:23):
My point is, you don’t have the same velocity of money.
John Norris (13:30):
No, you don’t have the same velocity of money or anywhere near it. So arguably, could you say that that could slow our economy down moving forward if we’re spending an increasingly sizable chunk of our money on things to entertain us in the short term? Because essentially, I mean, we’re looking at something that’s almost immediately consumable as opposed to something that has tangible value that’s going to last six- or 12 months, a durable good. So do you think that that could potentially slow down the economy or actually strangely enough, speed it up?
Sam Clement (14:03):
I think it depends on where the cuts are coming from for this and what the turnover this velocity of the money is once it is spent in these categories. I think that’s really important. If you’re just, this could be compared to the government, the Federal Reserve. The point of inflation is to get people to go out and spend money and turn money over. If your spending habits change in a way that reduces that velocity of money, that’s going to be detrimental to economic growth in the long run.
John Norris (14:36):
So what are some of the things that you’ll save up for in order to spend an extravagant amount upon and save by not buying your eggs at Publix or something along those lines.
Sam Clement (14:49):
We talked about I try not to buy too much at Publix, but, for me, trips are the thing. I’m not a concert person.
John Norris (14:59):
Well, you like both types of music, don’t you?
Sam Clement (15:00):
Yeah. I like Country and Western (laughs). But that’s to me, again, especially these Birmingham concerts. There’s a few I’ve seen that are coming to Birmingham. That sounds awesome. Let’s get in the ticket line for the online and the nosebleeds are $300/ $400. That means I’m out 800 bucks for two tickets to me for concerts. That’s not really worth it.
John Norris (15:25):
Well, you’re probably going to want to have a couple beers and get something to eat and Uber back and forth.
Sam Clement (15:31):
$18 beers. You’re out $900 to $1000 for not that great of tickets.
John Norris (15:35):
But you see Chris Stapleton!
Sam Clement (15:37):
Or I get some good flights and that gets me two round trip flights to London, I’d rather do that.
John Norris (15:43):
Well, I hear you.
Sam Clement (15:44):
And I get you have more expenses on top of that, not just getting there. But if I can get there, I’d rather do that.
John Norris (15:50):
Now, I got to tell you, my $75 tickets to go see Morrisey are not going to set me back. It’s not like I’m trying to go see Chris Stapleton or some of the other acts that will come through Birmingham. But I hear what Sam is saying. And one of the things that I do like to spend money on in terms of entertainment value, I do like to go watch live music. I haven’t seen as many shows this year because this year the nostalgia tours really haven’t come through Birmingham quite so much. I mean, last year we, I saw Peter Frampton and I saw
Sam Clement (16:20):
You saw Hootie didn’t you.
John Norris (16:21):
It seems like I see Hootie all the time, saw Drivin and Cryin, saw who else? The Connells. So some bands that you’ve just, I’m making up names right now as far as you’re concerned.
(16:33):
This year I’m seen Hootie and the Blowfish. We actually traveled to Boston to go see that. And I mentioned, I think this is the fifth time I’m going to mention Morrisey. That’s kind of how I like to spend my entertainment dollar. I don’t care if I ever go see another football game at Bryant-Denny or Jordan-Hare. I really don’t. Maybe I’ll make it up to Grove Stadium in Winston-Salem periodically, but the tickets aren’t what they are down at Tuscaloosa or Auburn. And so when I’m taking a look at things that I like to splurge upon in terms of entertainment, in terms of all these things, these experiences, if you will, travel’s fantastic. I wouldn’t mind traveling more and then also live music as well. However, if I’m spending, this is more of a personal thing as opposed to a generational thing or even an economics thing. If I’m spending, and you remember last year I went to go see U2, I traveled to go see them in Las Vegas at the Sphere. If I’m spending that amount of money, I’m not going to tell you how much, but my trip to Las Vegas that I went to go see U2. Do I have any right to come back and complain about how much Mexico Lindo is?
Sam Clement (17:46):
You do, I think, but probably less than someone who couldn’t go to Mexico Lindo and definitely wasn’t going to Vegas. I mean, I don’t think that’s a “Hey, you did something fun, shut your trap.”
John Norris (17:59):
If I’m spending 150 bucks plus in order to go see an obscure British musician, can I complain about how much the eggs are at Publix?
Sam Clement (18:09):
I still think you can, because so much of this was caused by overspending of our government. So just the fact that anybody can take one, do one nice thing or go on one nice trip, doesn’t minimize the fact that prices are too high on goods that people have to have. This isn’t a demand thing. This isn’t the Sphere once-in-a-lifetime-experience.
John Norris (18:36):
That was really cool.
Sam Clement (18:36):
Yeah, buying food to put on your table for the week, that is justifiably worthy of complaint.
John Norris (18:44):
Okay, fair enough. Okay, now kind of delving off into almost a segment of the sides, I do have to ask Sam some questions here. The first one is, I know that you have not been out to the Sphere.
Sam Clement (18:54):
I have not.
John Norris (18:55):
U2 carries no interest. You probably before you started working at Oakworth, couldn’t have named four tunes U2. And although you’ve obviously, although you do this with me and I like U2 and David McGrath, our man on the street down in Mobile is a massive U2 fan. You still can’t name four tunes.
Sam Clement (19:15):
They automatically put songs on your phone back in the day. And I still can’t name four song.
John Norris (19:18):
Let’s not go there. That’s an embarrassment for one of the better bands ever. Now, you obviously wouldn’t spend money to go see U2. Now if George Strait were going and playing at the sphere and you could get someone to take care of your daughter… would you think about a little trip to Vegas?
Sam Clement (19:42):
I don’t know
John Norris (19:42):
That’s a trip. You love trips. You’ve already mentioned it.
(19:45):
And then you get to see George Strait in the Sphere.
Sam Clement (19:48):
Look, that sounds awesome, except for the fact that I would rather spend my money doing something else. There’s almost, if that trip’s going to cost what a couple thousand probably all said and done, I would rather take even a three day trip somewhere and have more of a vacation than spending the bulk of the money just on a concert. To me, concerts are pretty low. I mean, look, they’re fine. I would love to be there. I went to Red Rocks. I thought that was an amazing experience.
John Norris (20:20):
Who did you see there ?
Sam Clement (20:21):
String Cheese Incident.
John Norris (20:22):
Oh, there you go.
Sam Clement (20:24):
So, it was an awesome experience, but if I was going to have to spend thousands of dollars to do that again, I’d rather figure out a way to go back to France or something.
John Norris (20:33):
Alright, so kind of almost last question. I don’t know how much time we have left, but we got to be nearing the end here. I’ve got to ask you this one as well. So we’ve talked about people spending a ton of money on experiences. I’ve done it by traveling to go see bands and music and all that stuff. You went to Europe last year, it looked like you had a wonderful time at a Premier League game. Drinks were flowing. Food was beyond all over place. You were sitting in one of the sky boxes while the Hoi Polloi can’t even get a pint inside the stadium, if I’m not mistaken.
Sam Clement (21:09):
That is correct.
John Norris (21:10):
So you were willing to pay for that type of thing. I’m willing to pay for this type of thing. What would you say the average American would rather spend their extravagance money on.
Sam Clement (21:22):
I think traveling. I really do. I mean, we’ve seen this in the data of countries in Europe, and I keep just saying Europe, there’s obviously other places, but the focus on Americans traveling to Europe. I mean, it’s shown up in the economic data for Portugal, for Spain, France, and for England, the amount of foreigners that are coming to these countries for trips. And I think that social media plays a big role in that. I mean, you see, I could tell you friends that I have that are in Europe right now, I mean, you see this comparison.
(21:56):
I think these vacations, these big trips become a keeping up with the Joneses part of it, and just a generational change in where we find value. And I mean, I can listen to my music. I can get 60% of the way there. So I think my generation as a whole leans on traveling, especially foreign traveling or international traveling.
John Norris (22:26):
I’ll tell you, my generation, at least my friends, people that with whom I associate, I’d say it’s kind split. I mean, people still like to travel. They do that almost as a matter of course. But damn, you get a nostalgia act that comes through town. People will show up for that. I mean, they really will. And because of the way musicians are paid now you’re seeing more and more of these nostalgia acts come around
Sam Clement (22:51):
The royalties aren’t coming through as much.
John Norris (22:51):
No, no, they’re not coming through. I mean, the Connells, a perfect band out of Raleigh. They had some albums, never quite made it as big as REM, which I think I’ve told you about at one point REM. You didn’t know who they were. And so the Connells, but all of a sudden they went on and got their other jobs, they had their lives about it. But then all of a sudden it’s like, what are we doing here?
Sam Clement (23:18):
Reunion tour!
John Norris (23:19):
A reunion tour and people, paying 25 bucks a ticket to cram 500, maybe a thousand deep into an arena, a small arena or a small venue. These guys can pocket a few G and then be back in Raleigh on Monday.
Sam Clement (23:36):
Sounds great.
John Norris (23:37):
Well, so why wouldn’t they do that? And so that’s the reason why we are seeing a lot more of these sort of reunion tours, nostalgic stuff. I mean, does anyone really need to go see Def Leppard and Poison again?
Sam Clement (23:50):
Probably not.
John Norris (23:50):
They seem to come to town every year, but they pack them all in. And so I’m telling you, I go to these places. I bring down the median age at some of them. And so I would say it’s kind of a combination between travel, which people will do, and then also the music. I will tell you though, I don’t know where sports fits in with me. Someone gives me a free ticket to some games down in Tuscaloosa or even Auburn. I may or may not go.
Sam Clement (24:20):
Really?
John Norris (24:20):
Does that sound crazy?
Sam Clement (24:22):
See, I love going to games down in Auburn, but I mostly go when I’m not paying for tickets. I can’t tell you the last time I paid for tickets.
John Norris (24:29):
And I tell you, I think it’s probably just me just being more misanthropic than anything else. And then also the whole state, even experience has just gotten so cramped that it’s not a lot of fun. So in the end, I’m not exactly sure what all we covered just other than talking about the economic possibilities or ramifications, I guess is a better word, of how people are spending money and how it’s really kind of changing/
Sam Clement (24:55):
Experiences, no matter what.
John Norris (24:56):
Experiences are really changing. And I don’t think the CPI, the Consumer Price Index does a very good job tracking that, or at least the percentage people or American consumers are willing to pay on such things. I certainly think that the GDP report probably doesn’t do a very good job with that. So I think really Washington, the BEA, the BLS, the Census Bureau, all these organizations really better start rethinking their methodologies to better reflect the change in consumer patterns of the American consumer.
(25:30):
Alright with that, guys, we always love to hear from you all. So if you have any questions or comments, please by all means, let us know. You can always drop us a line to or you can leave us a review on the podcast outlet of your choice. As always, if you’re interested in reading more or hearing more of what we have to say or how we think, you can go to oak orth.com, O-A-K-W-O-R-T h.com, take a look underneath the Thought Leadership tab and find links to all kinds of exciting information, including previous episodes of Trading Perspectives, as well as previous issues of our newsletter / blog Common Cents, as well as our quarterly magazine, Macro & Market as all very sundry components and parts, as well as other information from our investment committee as well as Mac Frasier and the Advisory Services group.
(26:20):
Alright, with that, I stumbled through that. But Sam, do you have anything else to say on how you like to spend your money in an extravagant fashion?
Sam Clement (26:26):
That’s all I’ve got.
John Norris (26:27):
That’s all I’ve got today too. Y’all take care.