This week, Tiffany & Co (TIF) posted financial results for the first quarter 2013 that blew away Wall Street consensus. By now most know my grand economic thesis and reason for bullishness over the past several years has been based on global peace and global prosperity. I do not think the world has ever been this peaceful with respect to wars and killing, nor has it seen prosperity and economic hope this widely dispersed.
For some reason, I still do not see or hear many analysts on Wall Street mention these factors. Instead there is the legitimate argument about valuations of American companies, and there is the heated debate that this is all just the byproduct of money printing. Well, those profits are real but smart companies long ago shifted the focus to growth outside of the United States. As for the Fed, there is an impact and it may become greater as equities become the only game in town, but there still isn't a bum's rush of Main Street excitement about stocks, and institutions are still holding bonds.
In addition to American know-how, another export that's worth investing in is American customs. Hollywood is a giant beneficiary of this trend but so, too, is Tiffany. That's because the rest of the world is embracing diamond engagement rings—big time! Tiffany struck gold outside the United States initially in Japan, which became more important than the domestic market. However, two decades of lost economic growth made the Land of the Rising Sun a liability rather than a hot growth asset. Like any smart business, the company began to spread its wings around the globe.
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