By The Sizemore Letter<\/u><\/p>\n
The Irish are fleeing Ireland at the fastest rate since the Potato Famine.<\/p>\n
Think I\u2019m exaggerating? I assure you I\u2019m not.\u00a0 Recent data had one person leaving the Emerald Isle\u00a0every six minutes<\/a>.<\/p>\n Since the onset of the financial crisis, nearly 400,000 people have left Ireland.\u00a0 That may not sound like much at first, but the population of the entire republic is only about 4.5 million.\u00a0 That means one out of nine Irishmen has left the country in just the past five years.<\/p>\n Some wandering Irish have since found their way back home, but the flow remains unmistakably outward.<\/p>\n This may sound counterintuitive, but I consider the Irish willingness to wander a source of strength, and it is a reason why I expect Ireland will eventually emerge from Europe\u2019s sovereign debt wreckage in better shape than some of the other hard-hit countries such as Italy or Spain.\u00a0 Let\u2019s consider a few demographic points.<\/p>\n To start, even after years of crisis, the Irish have maintained a much higher birthrate than their Catholic brethren in the Mediterranean.\u00a0 Ireland has the\u00a0highest birthrates in the European Union<\/a>.\u00a0 Interestingly, nearly a quarter of babies born in the republic were to mothers born outside the country\u2014this gives you an idea of how cosmopolitan Ireland became during the high-immigration boom years.<\/p>\n Putting numbers to it, Ireland\u2019s total fertility rate for 2011 (the last year for which there is final data) was 2.1 babies per woman.\u00a0 In both Spain and Italy, the number was 1.4 babies per woman.<\/p>\n Aside from being interesting factoids for cocktail conversation, why does this matter?<\/p>\n It matters because the babies born today are the workers and\u2014even more importantly\u2014the consumers of tomorrow.\u00a0 \u00a0A country without a healthy birthrate is a country without a future.\u00a0 The modern consumer economy depends on a steadily increasing supply of consumers to function; it\u2019s hard to run a business when your pool of potential customers gets smaller every year.\u00a0 Look at urban wastelands like Detroit\u2014which has seen outward migration for decades\u2014and you\u2019ll see what I mean.<\/p>\n But didn\u2019t I just say that Ireland is hemorrhaging people?\u00a0 I did.\u00a0 But those stats did not tell the entire story.\u00a0 Yes, nearly 400,000 Irish have left the country.\u00a0 But about 277,000 of them have returned or have been replaced by new immigrants.\u00a0 And as Ireland\u2019s unemployment rate continues to tick downward, I expect many of the young Irish who left to work in the UK, Canada or Australia to make their way back home, and bring with them the skills and experiences they picked up while abroad.<\/p>\n This won\u2019t happen tomorrow.\u00a0 But ten years from now, the Irish workforce may be the envy of Europe.<\/p>\n All of that is great, but what does any of this have to do with money and investing?<\/p>\n To start, Irish stocks have quietly been enjoying a bull market as the country works its way out of its long recession.\u00a0 The\u00a0iShares MSCI Ireland ETF<\/b>\u00a0(<\/span>EIRL<\/a>)<\/span> is up over 40% in the past year.<\/p>\n I\u2019m not suggesting you go run out and buy Irish stocks today.\u00a0 The overall Irish market is far too heavily concentrated in basic materials for my liking.<\/p>\n But I would definitely recommend keeping an eye on Ireland as a hotbed for innovation in the years ahead.\u00a0 This is the country that revolutionized European air travel with\u00a0Ryanair<\/b>\u00a0(<\/span>RYAAY<\/a>)<\/span>, the European equivalent of America\u2019s cut-rate\u00a0Southwest Airlines<\/b>\u00a0(<\/span>LUV<\/a>)<\/span>.\u00a0 Ireland\u2019s demographic convection current of constant inward and outward migration gives it an intellectual and commercial vitality you would normally expect to see somewhere like Silicon Valley.<\/p>\n Think about that over your next Guinness.<\/p>\n Charles Lewis Sizemore, CFA, is the editor of the\u00a0Sizemore Investment Letter<\/a>\u00a0and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he had no position in any stock mentioned.\u00a0Click here<\/a>\u00a0to learn about his top 5 global investing trends and get your copy of \u201cThe Top 5 Million Dollar Trends of 2013.\u201d<\/em><\/p>\n This article first appeared on Sizemore Insights as Ireland\u2019s Demographics Point to Bright Future<\/a><\/p>\n