There are two top performing companies in the retail space now, W and AMZN. Everything else has been ripped to shreds. The death of the shopping mall is not being promoted enough, leaving mallfags with a false sense of security to believe that this ‘dip’ will bottom out and the good times will return again.
(ADJUSTS MICROPHONE)
Over the past 3 years, the median return for the department stores is DOWN 55%.
Over the past 3 years, Amazon is UP 215%.
For the past 12 months, all of the department stores, combined, posted revenues of $128.5b, with free cash flow of $1.45b. All of the apparel stores, aka the shit in the malls, posted revenues of $107b, with free cash flow of $6.4b. More than $4b of the free cash flow was produced by three companies: JWN, LB and ROST.
Amazon posted $113b, with free cash flow of $6.7b.
Quarterly revenue growth for the department store sector is down 5% over the past 12 month, whilst Amazon is higher by nearly 30%.
Now extrapolate these numbers over the next five years and tell me what the retail landscape will look like. Moreover, what will happen to all of the REITs will mall properties, dependent on dying retailers for their income?
There’s a reason why I’m mentioning this, as part of a greater overall thesis that I intend to talk about over the not-so-distant future. There is nothing wrong with using technicals to buy/sell stocks. However, ignoring the fundamentals is a sure-fire way of being caught off guard by an earnings warning, which could surprise rape you because you weren’t paying attention.
Quit being lazy. Screen out the bullshit. I have empirical evidence showing that buying companies with good fundamentals shatters the performance of those lacking. More on that later next week.
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Costco has been a notable exception too
http://finviz.com/publish/051317/COSTc0ml1931.png
Price is truth!
And you are a fucking RODENT. STFU.
A luciferian looking down on a rat. How funny.
Listen, fuckface. “Luciferian” is some bullshit that tinfoil headed fucks like you spout off after graduating from youtube university.
Read a fucking book.
Michael Burry did something similar to what you are trying to do back in the early 2000’s. He picked stocks on fundamentals/value then used technical analysis to set the entry and exit points. Sounds like a very simple strategy but it worked amazingly well.
I’ve had some success with undervalued small caps. But in my case it took forever for the intrinsic value to be realized. So I would get a 500% return but it would do nothing for five years and then go up 500%. Still a good return, don’t get me wrong, but it was good when the market was going nowhere (2014 -2015). Now that it’s going some where I want to keep pace.
When you’re dealing with more liquid stocks (mid/large cap), earnings growth narratives matched by real numbers will work great. But the newsy, buzzy stocks with great fundamentals wind up priced to perfection. Superstars then poof.
Two of the best stock investments of the past 15 years have been Denny’s 2002-2005/2009-2015 and Cheniere Energy 2009-2014. Is there an algorithm that could have got me into them? Or the next one?
Cliff Asness did some interesting research on a sampling technique that worked for small caps to generate alpha. Interestingly low beta was the most important component of his “quality factor” that generated alpha in sampled small caps relative to the rest of the market. Low beta small caps beat their peers and the rest of the market in the long term. A surprising conclusion. Goes along with your theory that small caps have turned into a shit pool since guys like Fred Wilson started hogging all the good stuff for themselves. Only, surprisingly, once you weed out the shit you get alpha relative to mid caps and large caps.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2553889
Agree. Don’t know why some people are so intent on dumpster-diving in retail stocks.
Because we are not gutless turds you fucking little bitch.
The mall is still an experience and place to go.
Amazon at the height of its power right now and runs at the same margins of dying companies.
Matt- Or… it could be said social media is preferred experience now, and Amazon lives in that world.
It is said younger people are more easily persuaded by marketing and they tend to like what’s new and hot.
Advertisers and much of business chases the young. As opposed to old folks like me, set in our ways. 🙂
There will be a mean reversion then at some point. The young also try to be trend setters by bringing dead stuff back in favor.
There’s tons of articles written in frustration about hating how the smart phone life has devoured human interaction.
Yes. A person with a functioning brain for once.
Modern day general stores. However if they improved the customer experience with tech and imepoved the customer experience with some services and moderness they might have chance. I dont go to Costco or amzn because its fun ingo there because its cheaper and its easier. Strike the balance between amzn costco with a modern easy shopping experience and you win. Drive thrus?
Ross Stores are always packed. I don’t foresee them going away.
That’s because Ross shoppers are homeless.