The Race for Space

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Moving forward beyond the pandemic of 2020, the theme the world woke up to is that people want more…more home, more land, more entertainment, more goods. We learned that more is a scarce good today. The best phrase for capturing the mind of consumers today is what a partner of ours mentioned to us: The Race For Space.

Looking at the portfolio holdings of the Fund, you must recognize that we are optimistic about the future. We are particularly optimistic because the Race for Space has catalyzed a mindset that has been around in the developed world before, but it was comatose for quite a long time. Many people sought out homes in the suburbs. They did this for more space. Space could be a larger home, a larger yard for garden parties, more bedrooms for their kids, etc. The reasons are not individual. It is the wholesale mentality change from 2019 that interests us.

Prior to the pandemic, very smart people began predicting the decline of fossil fuel vehicles. The pandemic has swatted this illogical reasoning away. Consumers are driving more total miles today than ever before. People decided against sharing commutes on a subway or on buses. Young people, what we refer to as millennials, went out and purchased used cars to a level where we practically ran out them. This is all evidence that the psychological change which has transpired is so different from the pre-pandemic period. This evidence stands in contrast to the style of decisions made prior to the pandemic. Below is a chart that shows the move rate of Americans charted alongside the total number of moves.

Our suspicion is that the US Census Bureau data this chart is derived from is showing lagging information. We are very interested to see the 2022 data as we believe it will show an uptick of movement due to the Race for Space.

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