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Tickers in this Article: AOC, MAN, MPS, PRXI, ELY, NKE, FO, SPKL, BWLD, SPKL.OB
On February 12, 2008, America's first baby boomer, Kathleen Casey-Kirschling, received her first Social Security payment. That was just the beginning. Over the next 20 years, 80 million boomers (those born between 1946 and 1964) will begin collecting Social Security. That's an average of more than 10,000 per day. The wave of retiring boomers has been dubbed the "silver tsunami".

When World War II ended, there were 44 people paying into Social Security for every retiree. Now only three people pay in, for each person taking out, and it could be bankrupt by the year 2043. So, if Social Security doesn't benefit from boomers retiring, who does?

Addressing Labor Shortages
Aon Corp.'s (NYSE:AOC) consulting division surveyed large employers to find out what they thought would happen to their corporate performance once boomers started leaving the workforce. A significant number, 60%, of businesses felt that a vacuum in leadership would occur, hurting them financially. Last year, when Aon conducted the same survey, only 16% felt this would be a problem. It appears that one year of economic slowdown has jarred the ivory towers.

Who will rescue corporate America from its tricky predicament? The leading choice, from an investment perspective is Manpower (NYSE:MAN), an employment services company. Revenues worldwide in 2007 were $21 billion with $485 million in net earnings. It's a solid company. Unfortunately, only 12% of total revenue comes from the United States despite its base of operations being in Milwaukee. The majority of revenue, 67%, is from European business, so it's not entirely American sales but it's internationally diversified. My "made in America" solution goes to MPS Group (NYSE:MPS), a Jacksonville-based staffing business specializing in professional services and information technology. Its revenue in 2007 was $2.17 billion with operating income of $134 million. Most importantly, in three fiscal years, it has improved operating margins to 6.2% this past year from 3.7% in 2004. Staffing solutions in the coming years are going to be critical to a company's success or failure.

Looking For An Experience
As baby boomers settle into retirement they'll be interested in learning new things, not just collecting more stuff. Therefore, companies that can give them an educational or cultural experience are likely to win their attention.

One company, Premier Exhibitions (Nasdaq:PRXI), creator of the Titanic Exhibition is routinely adding new touring shows to its roster. The newest, Sports Immortals, which it is operating under license, will open in the second half of 2008. It plans to have several traveling exhibitions of sports memorabilia crossing the country. In terms of revenue, the 2008 fiscal year was a resounding success. Full-year sales were $61.5 million, slightly more than double those in the previous fiscal year. However, as the company ramped up its business hiring several key executives, including a CFO, the bottom line took a hit. It's definitely something to keep an eye on in the coming quarters as pre-tax margins were a full 10% lower to 31% in fiscal 2008. Otherwise, it's clear sailing.

Golf Anyone?
Golf is a difficult business to assess. Every time it looks like it's going to take off, it goes in the tank. We've heard over and over again that golf is set for a popularity explosion, but that prediction has proved to be a bogey so far. Who can spend five hours on a golf course? Will boomers be willing to sacrifice their retirement hours wilting away out there?

The National Golf Federation believes that by the year 2015, boomers will play 75-100 million more rounds per year than they do today. If this is true, all sorts of companies will benefit from the resulting explosion in participation, including Callaway Golf (NYSE:ELY), Nike (NYSE:NKE) and Fortune Brands (NYSE:FO). Travel companies providing luxury golf tours to Scotland and elsewhere will benefit as well. While it hasn't happened just yet, there should be a serious consolidation of golf course ownership, resulting in the creation of special purpose acquisition corporations to carry out these acquisitions.

Boomer Entrepreneurs
When the parents of the first baby boomers retired, they went to Florida in the winter. That was about it for world travel and retirement plans. How times have changed. Boomers, and even their parents, are doing much more in retirement today including starting businesses. Some will start from scratch while others choose to invest in a franchise, where there is a proven model of success including training and support.

Restaurants and eateries are a popular option for many. Specialty concepts like Spicy Pickle (OTC:SPKL) and Buffalo Wild Wings (Nasdaq:BWLD) are doing great things in the restaurant business, despite being expensive as franchise start-ups go. Both are in the Top 25 of Fast Casual Magazine's Top 100 Movers and Shakers for 2007. (To learn if franchises make sound investments, check out Is Buying A Franchise Wise?)

Bottom Line
Baby boomers continue to be an elusive demographic. The businesses that do a good job catering to the needs of the silver tsunami will develop substantial and loyal followings. These are companies to own long-term.

For more on the baby boomer situation, see Boomers: Twisting The Retirement Mindset and The Generation Gap.

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