After several years of price increases, consumers have come to expect that the typical Turkey Day dinner will cost more this year. Depending on how astute a shopper you are, you could get away with paying less this year.

 

Some items on your dinner agenda may be more expensive than in 2023 but others may have dropped in price. The price may also depend on where you shop and whether you insist on buying only name brands or are willing to buy store brands instead.

 

Every year since the COVID pandemic, grocery store prices and costs have been going up with the largest contributors to the cost being transportation, labor, and climate change. In 2020 (plus-3.5 percent), 2022 (plus-9.9 percent), and 2023 (5.8 percent) food prices rose and continue to go up. Overall, food prices are expected to increase by 2.3 percent in 2024.

 

And while the trend of rising prices still has not changed, what has changed is the consumer's willingness to pay higher and higher prices. To rein in food costs, shoppers are buying cheaper store brands over the last few years instead of name-brand food items.

 

You have probably noticed how store brands now have as much a share of shelf space as name-brand items. The trend has been a boon for supermarkets and the brightest light in the grocery food and nonfood business. Last year sales of store brands rose to $152 billion from $142.4 billion a year earlier, a 6.7 percent increase. The share of grocery shelves for store brands versus national brands rose to 26 percent from 25 percent last year. That is a historical record.

 

What does that have to do with the price of turkey? Plenty. A Thanksgiving dinner for 10, including turkey, stuffing, salad, cranberries, dinner rolls, and pumpkin pie would cost you $90 if using only name-brand labels. That is down 0.5 percent from last year. But if you only bought store-brand products, the total cost for the same dinner would be $73.

 

However, like everything, there is a catch. Store brands have done so well over the recent past, that grocers have started increasing prices. The Wells Fargo Agri-Food Institute which tracks prices of Thanksgiving dinner staples, discovered that the gap between the cost of a full meal using generic brands and one prepared with national brands is narrowing. In several categories, the report found that name brands are less expensive or almost the same.

 

Fresh turkey prices, for example, are largely unchanged since last year, but name-brand birds (that still account for three out of four turkeys sold), fell in price by 2 percent since 2023. Store-brand turkeys, although still cheaper, have increased in price by almost 5 percent over the same time.

 

And yet name-brand stuffing is up 9 percent, compared to only 3 percent for store-brand versions. Name-brand cranberries fell by 3 percent, while store brands rose by 6 percent. In every category of the typical Thanksgiving dinner, there were substantial price differences between the two brands. That means shoppers need to compare prices closely.

 

In further good news for consumers, price wars have developed among grocers and others providing turkey dinner deals. Walmart, for example, is offering a 29-item dinner for eight for $55. Target has one that feeds four people for $20, while Aldi has a dinner for $47. Around here, one grocery chain offers a meal similar to Walmart's at twice the price. Most of these promotions are substantially less than last year's price tag.

 

My dog, Atreyu, and I love the holiday season. I just finished cooking my second 99 cents/pound turkey of the season. My wife, Barbara, only likes the drumsticks and wings, so I eat some of the white meat, freeze the rest, save the carcasses, and make turkey soup. The rest becomes healthy dog food for Atreyu.

 

Go ahead and laugh but consider this. The price range for a pound of popular healthy dog food at Walmart ranges from $1.92/pound to $5.67/pound.  Turkey is healthy and the cheapest protein around. It is on sale during the holidays for dogs and humans. The promotions are kicking in at this point. I intend to buy another turkey this week  (only 49 cents/pound) plus a large ham/shank at 79 pounds (pea and bean soup) and maybe a big spiral sliced ham (at 99 cents/pound). Bon appetit! 

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Investors appear to be "dancin' to the Jailhouse Rock" ever since the election of President-elect Donald Trump. Private prison stocks have roared back to life as the deportation of immigrants becomes a reality.

 

Day One, according to the Trump team, the new administration will launch its promised plan to deport millions of illegal immigrants. Criticisms that the cost of such an endeavor would bankrupt the country have gone largely unheeded. Trump has responded that he has "no choice" and "no price tag" when it comes to what the media terms as the largest deportation in U.S. history. 

 

Wall Street believes that the appointment of hardliner Tom Homan as Trump's "border czar," could mean expanded contracts on the back of increased US Immigration and Customers Enforcement (ICE) enforcement combined with partnerships with U.S. Marshals and the Federal Bureau of Prisons.

 

Some policy groups that specialize in immigration have predicted GDP could shrink by $1.1 trillion to $1.7 trillion but according to most voters that would be a small price to pay to rid the country of the estimated 11 million plus illegals in the country. As a result, with investors' belief that the sky's the limit in spending, it is no wonder that the shares of the two largest prison stocks, GEO Group and Core Civic, have gained more than 80 percent in a matter of days.

 

These companies own and operate a nationwide network of prisons, immigration detention centers, and correctional facilities under government contracts. The latest figures (2022) of those incarcerated were just under 91,000 U.S. residents and upwards of 55,000 migrants. That was during Trump's first four years.

 

Thanks to lobbying efforts by both firms, there exists a hand-in-glove connection between the industry and federal policy decisions. That was worth $1.05 billion in sales (43 percent of revenue) from ICE for the Geo Group in 2022.

 

Core Civic received $552.2 million from ICE during the same period equaling 30 percent of total revenue. Both companies have been working with the Trump transition team to expand their capacity. Pro-private prison government benefactors argue that these companies, structured to generate profit while operating like public institutions, reduce overcrowding throughout the penal system. They reduce costs and offer specialized management expertise as well.

 

On conference calls last week, the management of both companies used words such as "unprecedented opportunity" and, in the case of Damon Hininger, CEO of CoreCivic, "It feels like with this election this year, we're heading into an era that we really haven't seen, maybe once or twice in the company's history." That was music to the ears of traders and investors alike.

 

Building prisons, especially given the number of illegal immigrants targeted by the incoming Trump administration, will not be built overnight. A 500-bed facility in San Diego, for example, costs $118 million to build. And running a 1,000-bed prison can cost as much as $143 million a year. However, the plan is to deport illegals, not just throw them in jail where taxpayers will be required to foot the bill for their incarceration.

 

As such, behind the scenes, there is much discussion among planners of "soft-sided" detention facilities ( tents with jail cells in them) as an interim step. That could reduce costs considerably. How this could be accomplished and still provide basic humanitarian treatment is another discussion. Given the present mood of the country, many might not even care.

 

Before you decide to buy into this jailhouse rock as well, know that there was a similar mood of euphoria surrounding these stocks back in the early days of Trump's first term. At that time both companies' stocks traded at or near long-term highs. Today, however, despite their gains, they are still trading far below those 2017 gains.  

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Now that the election is over and a clear winner has emerged, it is time to take a closer look at how investors perceive the winners and losers in the weeks and months ahead. It appears that the economy was the top concern of voters and therefore Trump's future actions within the economy will be important.

 

In the last month, there was speculation on Wall Street that Donald Trump would win the presidency. Certain areas of the financial markets nicknamed the "Trump trade" started gaining momentum.

 

Certain sectors saw gains while others experienced losses. Investors base their decisions on the actions of his past presidency and his statements and promises while on the campaign trail. The changes he plans to make within the economy could be substantial if Congress supports his economic programs.

 

The key to implementing his many promises and translating his electoral mandate into policy will be the caliber of people he appoints to key positions. He will also need a red wave in the House to complement  the Republican majority he will now command in the U.S. Senate. The Trump Tax Plan expires next year, for example, so a red sweep would raise the chances that most of that program would be extended.

 

If so, the financial sector, especially regional banks, is one sector that would stand to benefit. The banking industry often complains that regulatory authorities are the bane of their existence. A decades-long increase in reporting requirements while abiding by hundreds of rules and regulations is time-consuming and expensive. It is doubly so for regional banks.

 

During his stump speeches, Trump has vowed to cut the corporate tax rate to 15 percent and eliminate 10 regulations for every new one. He also promised to overhaul key regulatory bodies and fire the head of the U.S. Securities and Exchange Commission. For bankers and investors alike, this would be a dream come true.

 

Another area that would benefit from a Trump win was the crypto industry. The crypto money that supported Trump surpassed all other corporate donations during the 2024 elections. Trump has promised to make America the leading nation in the global crypto industry and fire their implacable enemy, Gary Gensler, the head of the SEC.

 

Cyclical companies, especially those whose business is largely confined to the United States, and small-cap stocks are thought to be beneficiaries of Trump's upcoming tariff policies. Tariffs during his first administration were part of the daily diet of the financial markets. This time, his entire presidency, from an economic viewpoint, will revolve around his tariff policies. Tariffs will be different and more stringent.

 

However, there are other areas where tax cuts, deficit spending, tariffs, and possibly a change in how the Federal Reserve Bank conducts policy could have a negative impact on interest rates and in the inflation fight.

 

During his last tour of the Oval Office, Trump was an advocate of lower interest rates and higher spending. At the same time, he made clear his unhappiness with the leadership of the Fed members, starting with the chairman. The bond market remains convinced that he will do much the same in his second term. As such, the nation's debt and deficit will climb. That means higher long-term interest rates. The yield on the U.S. Ten-year, U.S. Treasury bond spiked higher by more than 3.6 percent to 4.44 percent on the election outcome.

 

China and most emerging markets also suffered as the prospect of crippling tariffs will slow their export growth to the U.S. Gold and other commodities also fell as bond yields spiked and the U.S. dollar gained almost 2 percent.

 

On a longer-term view, I wonder how Trump's promise of a draconian immigration policy, combined with tax cuts and increased spending and the impact on tariffs will affect the inflation rate. Fewer immigrants will mean higher wages for Americans, which will mean higher inflation. Tariffs will be inflationary, raising prices on a wide spectrum of goods and services as it did the last time.

 

Increased spending and supply chain issues propelled inflation to 9 percent over the last few years and lost the Democrats this election. Tariffs could cause supply chain issues once again, and we all know how government spending impacted inflation. However, markets are ignoring longer-term issues in favor of chasing the Trump trade higher, at least for now.  

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Place your bets, ladies and gentlemen. The odds favor Trump right now, but anything can happen in the topsy-turvey world of online betting. That's right, presidents have now entered the list of what Americans can bet on alongside sports games, horse races, and blackjack.

 

Last month, a federal District Court judge ruled that betting on election outcomes was neither unlawful nor considered gaming. The Commodities Futures Trading Commission had fought against this outcome claiming that this kind of betting could undermine confidence in elections and adversely affect election integrity. The ruling made election markets legal for the first time in 100 years.

 

That set off a rush by various betting companies to begin offering odds on the Harris-Trump presidential contest. The market quickly ballooned to over $2 billion in bets and is still climbing. Kalshi, a startup company that had brought the suit and prevailed against the CFTC in court, enables users to place bets on real-world events. Rivals, PredictIT and Polymarket jumped in with both feet with Polymarket the clear winner thus far.

 

However, since Polymarket is a blockchain company, users are required to place bets with cryptocurrencies. The site also blocks American users. That was not an ideal set-up for many Americans.

 

This week, a U.S. retail broker, Robinhood Markets Inc., entered the fray. It saw an opportunity and began offering election betting for U.S. citizens. The stock popped 3 percent on the news. I expect similar announcements from other brokers in the future.

 

The instant success of this new betting arena can be partially explained by what is happening in the traditional U.S. polling industry. Over the past two elections, the polls have got it wrong. In this year's super tight race, the polls show a dead heat between the two candidates. Many traders started looking elsewhere to get a leg up on their political future and make a few bucks in the process.

 

They increasingly looked to the betting markets. Elon Musk, the Tesla CEO and a big backer of Donald Trump, argued recently that the betting market is "more accurate than polls, as actual money is on the line."  After all, it costs you nothing to answer a series of poll questions any way you like, but betting your hard-earned dollars on one candidate or another is a far more accurate indication of an election outcome, or so the reasoning goes.

 

Former President Trump's lead over Kamala Harris continues to widen at 67 percent versus 33.7 percent on the Polymarket site with elections just around the corner. Odds flipped in Trump's favor on Oct. 4 — a sharp reversal from September. A week later he was leading by more than 10 points.

 

As Trump's lead expanded in the betting markets, equity traders began to buy stocks that would benefit from a Trump win and sell those that wouldn't. As a result, equity indexes have been climbing higher, anticipating not only a Trump win but as his lead widened, a red sweep of Congress. 

 

But before you take a flyer and follow others in assuming Trump is the winner, take note. Prediction markets are not the stock market. They are small, with little volume, and the odds can easily be moved by a couple of big betters.

 

Polymarket has already identified at least a few big bettors. One of which pushed the odds above 60 percent with a $20 million bet on Oct. 18. This bettor appears to control four of the six largest Trump-voting accounts on Polymarket. Another player has spent $7.22 million on betting "yes" on Trump shares with an unrealized profit of $256,000.

 

Do not assume these big-money bettors are in their positions until election day. It is feasible that experienced bettors could take profits before or on election day. Professional gamblers might choose to bank gains on their Trump positions rather than risk losing everything on a Harris win.

 

They may not even be making bets on who they think will win the election. If the odds go haywire (as they have recently} the professionals will take the other side and bet on Harris instead.

 

Kalshi says there are 1.5 times more people betting on Trump than on Harris. There is no question that Trump voters are fiercely loyal. The demographics might also influence the odds. The betting markets are largely a male-dominated arena. Women gamble far less than men and may not be as enamored as their male counterparts with Trump. In addition, some believe Trump bettors may be younger and more comfortable buying and selling crypto. They may also have experience using online betting sites, while others do not.

 

What happens if the prediction markets get it wrong and Harris wins? Wall Street and the Trump bettors will lose money, but the Harris players who bet on the proverbial "longshot" could clean up. In any case, for a certain element of the population betting on presidents is probably just as exciting as seeing their horse come in or winning at the virtual craps table. As such, I suspect election betting is here to stay.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

There was a day when a man's love for his bride was measured by the clarity and size of a diamond ring. That notion is as outdated as believing that "artificial" or lab-grown diamonds are second-class stones.

 

Chances are that if you purchased a diamond this year, it may have been manufactured in a laboratory. Lab-grown diamonds account for roughly 46 percent of the U.S. diamond jewelry market. What is interesting is that while the quantity of diamonds sold is almost neck and neck with the natural market, as a percentage of revenue, lab-growns only account for 23 percent of sales.

 

There are two trends at work here. Natural diamonds are getting more expensive and as they do, lab-grown diamonds, which are much cheaper to manufacture have become increasingly popular.

 

Lab-grown diamonds are just as real as the diamonds dug up by miners in Africa or elsewhere. The difference is that the laboratory can make them perfect while mother nature will usually produce stones with several beautiful and even romantic flaws.

 

There are two methods of growing diamonds. In the chemical vapor deposition process,  a small diamond is placed in a chamber and exposed to carbon-rich gas and high temperatures. The gas ionizes and carbon particles stick to the diamond, eventually crystallizing into a diamond. An alternative process exposes a diamond seed to extremely high pressure and temperatures (like Mother Earth) and a metal catalyst helps convert pure carbon into a diamond.

 

Both methods create diamonds indistinguishable from the natural kind, at least to the naked eye. The growing period ranges from weeks to months and the final product is cut and polished into a gemstone. The result is a diamond that is considerably cheaper than the natural stone. The downside is that it is not as rare or unique.

 

For several years, the average cost of an engagement ring with a natural diamond was between $3,200-$3,600. However, between inflation and consumer taste, diamonds are getting larger in size and cost. The average size of a natural diamond engagement ring today is just under 2 carats, 50 percent larger than before lab-grown stones came on the market. Today, the average natural diamond ring is now selling for $6,628.

 

It is one of the main reasons that the lab-grown variety has become so much more popular. The price differential between the two types of diamonds is substantial. Four years ago, the average lab-grown diamond was about 1.2 carats and cost $3,887. This year, the average size is about 1.9 carats, just like the natural diamond, but the average price has fallen by about 30 percent to $2,657. 

 

Many aging Americans still prefer natural diamonds while younger generations are drawn to the lab-grown market. As someone who grew up believing the long-lasting marketing campaign that "diamonds are forever," I still lean toward that market despite the price differential. But I also know that many younger consumers have no idea what that means. 

 

Times have changed in other ways as well. Younger American men are now going ring shopping with their fiancees rather than with a sister or female friend. It turns out that today's bride-to-be is much more frugal in selecting rings. She prefers to save money in that department and use the money elsewhere. 

 

A young friend of mine, for example, just announced his engagement last week. His bride-to-be went shopping with him to select the ring. She settled on a black diamond ring, which is quite dramatic and different. Most black diamonds are superheated or irradiated to an almost black color. These stones do exist in their natural state but are extremely rare.

 

Natural diamond U.S. salespeople also like to remind younger shoppers that lab-grown diamonds have no resale value because they are so cheap to manufacture. It is one reason why so many overseas consumers of engagement rings continue to stick with natural diamonds. But that does not seem to faze the young-and-in-love, here at home.

 

The prices of natural diamonds have fallen by 6.4 percent this year, while the world's largest diamond producer, De Beers, has had its worst year in 20 years. Lab-grown diamond sales hit $12 billion in 2023, and volumes are expected to double from 9 million carats to over 19 million carats by 2030. And prices will get even cheaper.

 

This week, to stem the slide in sales, Signet Jewelers, which owns Kay, Zales, and the Jared chains, have just launched a marketing campaign with De Beers dubbed "Worth the Wait" to promote natural diamonds as "the ultimate symbols of love." Whether that will work in a country where no one waits for anything and equating money with love is unpopular remains to be seen.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.