Another Reason for Market Bounce and Today’s Near Death Experience

394 views

Am I the only one overwhelmed with reading bearish articles?  Of course the post-election sell-off didn’t help but as a trader I do not try to figure out the future or trade based off economic data or the effects of political decisions.  I only look at charts and indicators.  As observed by most traders, many charts are broken and the breakout trade is a tough one here.

On the flip-side there are many respectful traders that I follow that post reasons (macro & technical indicator related) for a bounce and I have to agree.  One indicator that I like to pay attention to and have written about before is the McClellan Oscillator (free in many charting packages).  I have previously wrote about it back on June 20, 2012 and July 24, 2012 showing areas where we have bounced.  Usually I like to focus on the -200 level for a bounce but the -150 level (on a closing basis) has also proven to be reliable.  I have included a 1 year chart of the $SPX with highlighted areas of where we fell below the -150 level (yellow line):

It is not my point to make a call of the bottom or a bounce for that matter, but I believe the odds are in the favor of some long positions.  I also think it is a late point to short the market and it may be a sound strategy to dip into some long positions based on your watchlist and theory of “a rising tide lifts all boats”.  In my opinion the winning trader here is the one that understands trade and portfolio risk.  I would be comfortable putting on 1/4 positions here and if they fail (stopped out), the overall loss is acceptable to the portfolio.  Remember no one is forcing you to trade, if you are uncomfortable then stay out and study past trades or continue your education.

I personally attempted a long position in $AAPL via an option spread back on 11/6 and knowing the publicity $AAPL gets you know that I am underwater.  I went into this position accepting a 100% loss on the option spread as my ability to monitor the market would be limited.  Even though I may take a full loss on the option spread, my overall portfolio loss will be around -1.5%.

**Today’s Near Death Experience**

Today while working out in the garage I was on the chest portion of the workout performing reps of 12 within the set.  This is when the craziest thing I have experienced happened.  While I was on the descent of my third rep, my bench came completely apart at the weld where it adjusts for incline/flat/decline.  I was performing incline and went to decline instantly.  At this point the weight bounced off my chest and I still don’t know how but I thrusted with my hips and arms and got the weight over my head (just barely avoiding crushing my head) and then fell off to the side.

This all happened in less than 3 seconds from break of equipment to me laying on my side.  When I got up all I could think was “what the hell happened and I wish I had that on video”.  Below is a picture where you can see the weld break and the now detached bench on the side:

Near death may be a little much but a possibility and definitely a grape-crusher.  Please don’t make fun of the rug I have there.  Gym mats are to be ordered soon.

Close to Home… “3 shot dead in Pa.; girl taken, found safe in Ohio”

559 views

It’s not often that where I live makes national news but this event made it but on an unfortunate case.  Keep in mind my town has about a 4,000 person population (no LA or NYC) and the place where the murder happened isn’t even a town but a rural area of farms.  It’s about 10 miles from my current location and an area I frequently hunt animals and other varmints.

Don’t ever think your town is too small and don’t ever rule out the psychotic side of love and emotions of the other half.

QUINCY, Pa. (AP) — A Pennsylvania man confronting his estranged wife about custody arrangements for their daughter shot the woman to death and killed her boyfriend and his mother, then fled with the 4-year-old girl before the two were found about 250 miles away in Ohio, authorities said.

For more information read here.  Thankfully the guy was found and the girl was retrieved but now with probable permanent mental scars.

“Man charged with manslaughter in Florida butt-injection case” -Reuters

445 views

Either carpenters are taking on new roles or this guy was looking for a way to get rid of some old house maintenance materials; either way its an outstanding profit margin while it lasted.

“…Oneal Ron Morris, 31, of Hollywood, Florida, is known to have injected other women with substances such as bathroom caulk, cement, Super Glue and the tire product Fix-A-Flat, officials with the Broward County Sheriff’s Office said.”

Read the rest here

Checking Out

939 views

With the summer comes vacation that many take and the argument for low volume that accompanies the choppy market conditions of the summer season.  As for me I will be taking my annual trip back to where I grew up in Minnesota.  It’s a 10 day vacation where I will be visiting my family in my home town in southern Minnesota and will then take the majority of the time in northern Minnesota to my dad’s house.  The time up there is where I get a majority of my lake fishing in as here in Pennsylvania it consists mainly of rivers and reservoirs. 

I like to desribe my old man’s place as my ideal retirement type place.  It’s secluded with many lakes within an hour drive and also some of those “secret” lakes known only to locals, plat books, & Google Maps.   This may be the ideal time given current market conditions.  One problem, if you want to call it that, is the lack of service through phone or Internet.  It’s what one might call “in the boonies” so being updated with what is going on in the market is a barrier.  But that can not always be a bad thing either as the peacefulness makes up for it.  My biggest battle will be with mosquitoes and hopefully the big ass fish on the other end of my line.  Good luck these weeks and trade well.

I leave Monday with the following positions on:

Cash – 86.3%
Long – 13
.7% (PPO 8.8%, DO 4.9%) (added to PPO position on Friday)
Short – 0.0% (exited PXD puts Friday)

Some pictures below:

1) House with pond, a “hidden” lake is behind the house

 

2) Me and my son going to hit some trails

 

3) My son trying to get those bass out of the lillies

 

I leave you with song from Rancid:

Standing Up to Tyrants

331 views

As I write this it is our Independence Day and please don’t forget what our Forefathers have done to stand up to the tyrants at the time.  This is a time when men were men and they said the modern day “F*ck You!” to those that wanted to govern & tax lands that were foreign.  Being of Irish decent yes I do have quarrels with those of said land of the past and I honor those of my Irish tradition and on a day like today when our Forefathers claimed their independence; I have nothing but deep respect.  These were men that stood up for what is right and proved it on the battlefield.  That being said, I have also made friends with the English in modern warfare and that we worked with some awesome British soldiers in foreign lands.  These were men that did not believe what their ancestors did were right, but reciprocated their actions with the up-most respective military action.  So please take a minute or many to honor those back in the day that stood up to the tyrants of the past and fought for what is right…soldiers & politicians (before money reigned supreme).

Also, I did not monitor market much at all do to other appointments but still remain with the following going into today:

Cash – 95.3%
Long – 4.7% (PPO 4.7%)
Short – 0.0%

From the Dropkick Murphys about Irish struggle but believe applies to our Forefathers:

“When abusive tyrants force the hands of matters great or small, it inpires men to stand up for their rights.”
-Dropkick Murphys; Heroes Of Our Past

http://youtu.be/2GfllMPjyTE

Out of Here…

851 views

..through next week that is.  I believe this comes at a good time too as we have seen recent selling and false breakouts to absolute frustration among traders.  This vacation will allow me to reset and come into the market with a fresh mind I am anxious to allocate long dollars but I have to keep reminding myself to be patient as the whip is in full force.  I wrote a post last night on My Game Plan Going Forward which stated that I am not ready to get aggressively long given the great day we had yesterday.  Today’s market action solidified my thoughts and patience was rewarded.

Living in PA, I am making the trek down to the mountains of NC about 1.5hrs southwest of Asheville.  Any craft beer loving trader knows about Asheville.  I personally love this area as it offers great country mountains and seclusion is easy to find surrounded by animal sounds and charcoal smell…peaceful.  I hope to retire to move to this are one day or to Alaska or back to the sticks where I came from in MN.

Either way I will be enjoying fine country Earth with views of waterfalls and mountains.  If you love day long hikes and are in the Asheville area I would suggest Panthertown Valley as this is the main area I like to go.  There is much to offer from scenic mountains & waterfalls to rock climbing and fishing.

Above is a nice view near an entrance not much into the trail I usually start at.  Below is a picture of one of my favorite waterfalls there named Greenland Creek Falls.

Another great part is that there is the element of surprise.  There is a reason they call it Panthertown, as they are present as well as bear and other wild game in the area.  While I haven’t seen one yet I always go prepared and ready for that ultimate adrenaline rush of attack.  It isn’t too often I see other hikers and this is just what wild game like.  The picture below is the K-Bar I carry that was a gift from my fellow Marines when I completed my service  and I like to think this puts me in that warrior spirit and fight for your life mindset….even though an attack from a bear or panther would probably end in death, but can’t go down without a fight.

 

 

Have a good weekend, good luck to all next week, and trade this whip of a market with a plan.

“China bars stock index web search after Tiananmen match” -BBC News

219 views

Apparently China is trying to get people to forget about Tiananmen, but it’s market makes memory with numbers.

China has blocked access to the term “Shanghai Composite Index” on some of the country’s most popular microblogging sites.

This was after the index dropped by 64.89 points on Monday.

The numbers correspond to 4 June 1989, the date of the crackdown against protesters at Beijing’s Tiananmen Square.

A search for “Shanghai Composite Index” on Weibo, the Chinese version of Twitter resulted in the message: “According to the relevant laws, regulations and policies, the results for this search term cannot be displayed”.

The correlation was not limited to just the drop in the stock index.

The market opened at 2,346.98 points, with many bloggers deciphering the 23 as referring to the 23rd anniversary of the crackdown and the rest of the numbers, 46.98, again forming the date of the crackdown, when rearranged.

BBC News
http://www.bbc.co.uk/news/business-18327767

How the American Investor is Starting to Feel

308 views

One of my favorite movie rants comes from Edward Norton who plays Monty Brogan in the 25th Hour, directed by Spike Lee.  In summary Monty is facing jail for 7 years  looks in the mirror at himself and on goes on a long rant saying fuck you to pretty much everybody & everything.

How America is thinking once again (1:25 into the video)

“Fuck the Wall Street brokers. Self-styled masters of the universe. Michael Douglas, Gordon Gecko wannabe mother fuckers, figuring out new ways to rob hard working people blind. Send those Enron assholes to jail for fucking life! You think Bush and Cheney didn’t know about that shit? Give me a fucking break! Tyco! Imclone! Adelphia! Worldcom!”

**Disclaimer – there are racial expressions throughout the video, watch at your own tolerance

What I like about this and find analogous with the market is how traders can feel with the current news surrounding the market.  In Monty’s rant he’s pissed at everything even his closest friends and family because as he’s going to jail while they get to continue to enjoy freedom.  I’m sure there are others like myself that want to say fuck you to the European Union and their governments for affecting our great run we had going and the confidence that was gaining by the retail and overall people.  It’s all given back and now the people are back to high distrust in the system.  In the end, like Monty, the trader/investor can’t blame anyone but themselves for continued losses because blaming does not get anything back.

Trade Like a Rabbit and Triumph

341 views

When you have days like today with relentless selling you can’t fall into that abyss of feeling sorry for yourself or getting overall pissed.  You must look at what you could have changed and learn from them.  I call all traders liars if they didn’t have a day where they broke or threw something that was on their desk or in their vicinity.  Learn and bounce back.  If you learn from the the mistake you will bounce back.

Keep up the confidence and triumph.  Keep those goals in mind and come back stronger than the day before.  I like the movie 8 Mile as it shows how one guy overcame some obstacles.  Particularly the last scene is my favorite.  It shows B Rabbit (Eminem) triumphing over his adversary and overcoming anxiety that he had before.  He came in stronger than ever and released what he had inside of him and crushed  his enemies.  Overcome the past and triumph!

This scene shows his final battle over the champion of battles, Papa Doc.  He dug deep and brought it out.

Brick and Mortar Retail and How I Buy Things

498 views

Going through my Twitter feed I came across a post that was retweeted by Josh Brown (@ReformedBroker).   The post he retweeted was from Rakesh Agrawal (@rakeshlobster) who’s post can be found below:

It starts with how Ron Johnson’s strategy for Sears ($SHLD) is being scrutinized by the intellects but it is in fact a long term strategy and not short term.  The strategy can be found in this article by the NY Times.   Rakesh goes on a nice rant on how some retail stores use their pricing strategy and how they use fake pricing, specifically the Gap ($GPS) and Macy’s ($M).  Some excerpts are provided below in regards to Macy’s:

“I was walking through the store and saw an interesting flatware set. It was “regularly” $140. It happened to be on sale for about $105. There was a super-special discount that the cashier rung in for me. Net price was around $90. I get home and find that Amazon sells it for $70. My reaction: “Fuck you, Macy’s.” I ordered from Amazon and took the thing back to Macy’s. (My phone was dead, otherwise I would have searched Amazon while I was at Macy’s.) ”

“One of the more ridiculous practices that Macy’s (I think still) engages in is the “preview day” sales. I was at a Macy’s and wanted to buy luggage. It was something like a $400 bag for $200. At least that’s what the price tag said. But I was there on the “preview day.” To walk out with it that day, I had to pay $400. But I could pay for it, reserve it and then come back in a couple of days. My reaction: “Fuck you, Macy’s”. “

He also mentions how mobile is changing the way people are shopping and I couldn’t agree more.  I use my smartphone for all bigger purchases anymore.

A recent example was during this past Christmas when I decided to upgrade from my 19″ TV/VCR/DVD combo (where the VCR/DVD didn’t work anymore) to one of those larger LED SmartTV’s.  I wanted to see how they looked in person as these bigger purchases are required to be seen in person, my preference anyway.  So I went to hhgregg ($HGG) and found the TV I liked.  I then proceeded to take out my phone, pull up my Google Shopper app, and typed in the description of the TV.  The lowest  price found was at Sams Club and for about $300 less.  So I showed the saleswoman and told her I can buy it here or there, I mean this is a $300 difference.  She walked away to confirm the price, did confirm, and I walked out of there with a $300 savings.  Now that’s winship!

I do this often with mobile apps on bigger purchases all the way down to boots.  Its simple to do and it works.  I believe that if these brick and mortar corporations want to survive they have to adapt.  Hell us traders have to adapt to current environments, why shouldn’t they.  The way I see it, its a win-win.  I get it now at a cheaper price and they get my business.

 

Another Reason for Market Bounce and Today’s Near Death Experience

394 views

Am I the only one overwhelmed with reading bearish articles?  Of course the post-election sell-off didn’t help but as a trader I do not try to figure out the future or trade based off economic data or the effects of political decisions.  I only look at charts and indicators.  As observed by most traders, many charts are broken and the breakout trade is a tough one here.

On the flip-side there are many respectful traders that I follow that post reasons (macro & technical indicator related) for a bounce and I have to agree.  One indicator that I like to pay attention to and have written about before is the McClellan Oscillator (free in many charting packages).  I have previously wrote about it back on June 20, 2012 and July 24, 2012 showing areas where we have bounced.  Usually I like to focus on the -200 level for a bounce but the -150 level (on a closing basis) has also proven to be reliable.  I have included a 1 year chart of the $SPX with highlighted areas of where we fell below the -150 level (yellow line):

It is not my point to make a call of the bottom or a bounce for that matter, but I believe the odds are in the favor of some long positions.  I also think it is a late point to short the market and it may be a sound strategy to dip into some long positions based on your watchlist and theory of “a rising tide lifts all boats”.  In my opinion the winning trader here is the one that understands trade and portfolio risk.  I would be comfortable putting on 1/4 positions here and if they fail (stopped out), the overall loss is acceptable to the portfolio.  Remember no one is forcing you to trade, if you are uncomfortable then stay out and study past trades or continue your education.

I personally attempted a long position in $AAPL via an option spread back on 11/6 and knowing the publicity $AAPL gets you know that I am underwater.  I went into this position accepting a 100% loss on the option spread as my ability to monitor the market would be limited.  Even though I may take a full loss on the option spread, my overall portfolio loss will be around -1.5%.

**Today’s Near Death Experience**

Today while working out in the garage I was on the chest portion of the workout performing reps of 12 within the set.  This is when the craziest thing I have experienced happened.  While I was on the descent of my third rep, my bench came completely apart at the weld where it adjusts for incline/flat/decline.  I was performing incline and went to decline instantly.  At this point the weight bounced off my chest and I still don’t know how but I thrusted with my hips and arms and got the weight over my head (just barely avoiding crushing my head) and then fell off to the side.

This all happened in less than 3 seconds from break of equipment to me laying on my side.  When I got up all I could think was “what the hell happened and I wish I had that on video”.  Below is a picture where you can see the weld break and the now detached bench on the side:

Near death may be a little much but a possibility and definitely a grape-crusher.  Please don’t make fun of the rug I have there.  Gym mats are to be ordered soon.

Close to Home… “3 shot dead in Pa.; girl taken, found safe in Ohio”

559 views

It’s not often that where I live makes national news but this event made it but on an unfortunate case.  Keep in mind my town has about a 4,000 person population (no LA or NYC) and the place where the murder happened isn’t even a town but a rural area of farms.  It’s about 10 miles from my current location and an area I frequently hunt animals and other varmints.

Don’t ever think your town is too small and don’t ever rule out the psychotic side of love and emotions of the other half.

QUINCY, Pa. (AP) — A Pennsylvania man confronting his estranged wife about custody arrangements for their daughter shot the woman to death and killed her boyfriend and his mother, then fled with the 4-year-old girl before the two were found about 250 miles away in Ohio, authorities said.

For more information read here.  Thankfully the guy was found and the girl was retrieved but now with probable permanent mental scars.

“Man charged with manslaughter in Florida butt-injection case” -Reuters

445 views

Either carpenters are taking on new roles or this guy was looking for a way to get rid of some old house maintenance materials; either way its an outstanding profit margin while it lasted.

“…Oneal Ron Morris, 31, of Hollywood, Florida, is known to have injected other women with substances such as bathroom caulk, cement, Super Glue and the tire product Fix-A-Flat, officials with the Broward County Sheriff’s Office said.”

Read the rest here

Checking Out

939 views

With the summer comes vacation that many take and the argument for low volume that accompanies the choppy market conditions of the summer season.  As for me I will be taking my annual trip back to where I grew up in Minnesota.  It’s a 10 day vacation where I will be visiting my family in my home town in southern Minnesota and will then take the majority of the time in northern Minnesota to my dad’s house.  The time up there is where I get a majority of my lake fishing in as here in Pennsylvania it consists mainly of rivers and reservoirs. 

I like to desribe my old man’s place as my ideal retirement type place.  It’s secluded with many lakes within an hour drive and also some of those “secret” lakes known only to locals, plat books, & Google Maps.   This may be the ideal time given current market conditions.  One problem, if you want to call it that, is the lack of service through phone or Internet.  It’s what one might call “in the boonies” so being updated with what is going on in the market is a barrier.  But that can not always be a bad thing either as the peacefulness makes up for it.  My biggest battle will be with mosquitoes and hopefully the big ass fish on the other end of my line.  Good luck these weeks and trade well.

I leave Monday with the following positions on:

Cash – 86.3%
Long – 13
.7% (PPO 8.8%, DO 4.9%) (added to PPO position on Friday)
Short – 0.0% (exited PXD puts Friday)

Some pictures below:

1) House with pond, a “hidden” lake is behind the house

 

2) Me and my son going to hit some trails

 

3) My son trying to get those bass out of the lillies

 

I leave you with song from Rancid:

Standing Up to Tyrants

331 views

As I write this it is our Independence Day and please don’t forget what our Forefathers have done to stand up to the tyrants at the time.  This is a time when men were men and they said the modern day “F*ck You!” to those that wanted to govern & tax lands that were foreign.  Being of Irish decent yes I do have quarrels with those of said land of the past and I honor those of my Irish tradition and on a day like today when our Forefathers claimed their independence; I have nothing but deep respect.  These were men that stood up for what is right and proved it on the battlefield.  That being said, I have also made friends with the English in modern warfare and that we worked with some awesome British soldiers in foreign lands.  These were men that did not believe what their ancestors did were right, but reciprocated their actions with the up-most respective military action.  So please take a minute or many to honor those back in the day that stood up to the tyrants of the past and fought for what is right…soldiers & politicians (before money reigned supreme).

Also, I did not monitor market much at all do to other appointments but still remain with the following going into today:

Cash – 95.3%
Long – 4.7% (PPO 4.7%)
Short – 0.0%

From the Dropkick Murphys about Irish struggle but believe applies to our Forefathers:

“When abusive tyrants force the hands of matters great or small, it inpires men to stand up for their rights.”
-Dropkick Murphys; Heroes Of Our Past

http://youtu.be/2GfllMPjyTE

Out of Here…

851 views

..through next week that is.  I believe this comes at a good time too as we have seen recent selling and false breakouts to absolute frustration among traders.  This vacation will allow me to reset and come into the market with a fresh mind I am anxious to allocate long dollars but I have to keep reminding myself to be patient as the whip is in full force.  I wrote a post last night on My Game Plan Going Forward which stated that I am not ready to get aggressively long given the great day we had yesterday.  Today’s market action solidified my thoughts and patience was rewarded.

Living in PA, I am making the trek down to the mountains of NC about 1.5hrs southwest of Asheville.  Any craft beer loving trader knows about Asheville.  I personally love this area as it offers great country mountains and seclusion is easy to find surrounded by animal sounds and charcoal smell…peaceful.  I hope to retire to move to this are one day or to Alaska or back to the sticks where I came from in MN.

Either way I will be enjoying fine country Earth with views of waterfalls and mountains.  If you love day long hikes and are in the Asheville area I would suggest Panthertown Valley as this is the main area I like to go.  There is much to offer from scenic mountains & waterfalls to rock climbing and fishing.

Above is a nice view near an entrance not much into the trail I usually start at.  Below is a picture of one of my favorite waterfalls there named Greenland Creek Falls.

Another great part is that there is the element of surprise.  There is a reason they call it Panthertown, as they are present as well as bear and other wild game in the area.  While I haven’t seen one yet I always go prepared and ready for that ultimate adrenaline rush of attack.  It isn’t too often I see other hikers and this is just what wild game like.  The picture below is the K-Bar I carry that was a gift from my fellow Marines when I completed my service  and I like to think this puts me in that warrior spirit and fight for your life mindset….even though an attack from a bear or panther would probably end in death, but can’t go down without a fight.

 

 

Have a good weekend, good luck to all next week, and trade this whip of a market with a plan.

“China bars stock index web search after Tiananmen match” -BBC News

219 views

Apparently China is trying to get people to forget about Tiananmen, but it’s market makes memory with numbers.

China has blocked access to the term “Shanghai Composite Index” on some of the country’s most popular microblogging sites.

This was after the index dropped by 64.89 points on Monday.

The numbers correspond to 4 June 1989, the date of the crackdown against protesters at Beijing’s Tiananmen Square.

A search for “Shanghai Composite Index” on Weibo, the Chinese version of Twitter resulted in the message: “According to the relevant laws, regulations and policies, the results for this search term cannot be displayed”.

The correlation was not limited to just the drop in the stock index.

The market opened at 2,346.98 points, with many bloggers deciphering the 23 as referring to the 23rd anniversary of the crackdown and the rest of the numbers, 46.98, again forming the date of the crackdown, when rearranged.

BBC News
http://www.bbc.co.uk/news/business-18327767

How the American Investor is Starting to Feel

308 views

One of my favorite movie rants comes from Edward Norton who plays Monty Brogan in the 25th Hour, directed by Spike Lee.  In summary Monty is facing jail for 7 years  looks in the mirror at himself and on goes on a long rant saying fuck you to pretty much everybody & everything.

How America is thinking once again (1:25 into the video)

“Fuck the Wall Street brokers. Self-styled masters of the universe. Michael Douglas, Gordon Gecko wannabe mother fuckers, figuring out new ways to rob hard working people blind. Send those Enron assholes to jail for fucking life! You think Bush and Cheney didn’t know about that shit? Give me a fucking break! Tyco! Imclone! Adelphia! Worldcom!”

**Disclaimer – there are racial expressions throughout the video, watch at your own tolerance

What I like about this and find analogous with the market is how traders can feel with the current news surrounding the market.  In Monty’s rant he’s pissed at everything even his closest friends and family because as he’s going to jail while they get to continue to enjoy freedom.  I’m sure there are others like myself that want to say fuck you to the European Union and their governments for affecting our great run we had going and the confidence that was gaining by the retail and overall people.  It’s all given back and now the people are back to high distrust in the system.  In the end, like Monty, the trader/investor can’t blame anyone but themselves for continued losses because blaming does not get anything back.

Trade Like a Rabbit and Triumph

341 views

When you have days like today with relentless selling you can’t fall into that abyss of feeling sorry for yourself or getting overall pissed.  You must look at what you could have changed and learn from them.  I call all traders liars if they didn’t have a day where they broke or threw something that was on their desk or in their vicinity.  Learn and bounce back.  If you learn from the the mistake you will bounce back.

Keep up the confidence and triumph.  Keep those goals in mind and come back stronger than the day before.  I like the movie 8 Mile as it shows how one guy overcame some obstacles.  Particularly the last scene is my favorite.  It shows B Rabbit (Eminem) triumphing over his adversary and overcoming anxiety that he had before.  He came in stronger than ever and released what he had inside of him and crushed  his enemies.  Overcome the past and triumph!

This scene shows his final battle over the champion of battles, Papa Doc.  He dug deep and brought it out.

Brick and Mortar Retail and How I Buy Things

498 views

Going through my Twitter feed I came across a post that was retweeted by Josh Brown (@ReformedBroker).   The post he retweeted was from Rakesh Agrawal (@rakeshlobster) who’s post can be found below:

It starts with how Ron Johnson’s strategy for Sears ($SHLD) is being scrutinized by the intellects but it is in fact a long term strategy and not short term.  The strategy can be found in this article by the NY Times.   Rakesh goes on a nice rant on how some retail stores use their pricing strategy and how they use fake pricing, specifically the Gap ($GPS) and Macy’s ($M).  Some excerpts are provided below in regards to Macy’s:

“I was walking through the store and saw an interesting flatware set. It was “regularly” $140. It happened to be on sale for about $105. There was a super-special discount that the cashier rung in for me. Net price was around $90. I get home and find that Amazon sells it for $70. My reaction: “Fuck you, Macy’s.” I ordered from Amazon and took the thing back to Macy’s. (My phone was dead, otherwise I would have searched Amazon while I was at Macy’s.) ”

“One of the more ridiculous practices that Macy’s (I think still) engages in is the “preview day” sales. I was at a Macy’s and wanted to buy luggage. It was something like a $400 bag for $200. At least that’s what the price tag said. But I was there on the “preview day.” To walk out with it that day, I had to pay $400. But I could pay for it, reserve it and then come back in a couple of days. My reaction: “Fuck you, Macy’s”. “

He also mentions how mobile is changing the way people are shopping and I couldn’t agree more.  I use my smartphone for all bigger purchases anymore.

A recent example was during this past Christmas when I decided to upgrade from my 19″ TV/VCR/DVD combo (where the VCR/DVD didn’t work anymore) to one of those larger LED SmartTV’s.  I wanted to see how they looked in person as these bigger purchases are required to be seen in person, my preference anyway.  So I went to hhgregg ($HGG) and found the TV I liked.  I then proceeded to take out my phone, pull up my Google Shopper app, and typed in the description of the TV.  The lowest  price found was at Sams Club and for about $300 less.  So I showed the saleswoman and told her I can buy it here or there, I mean this is a $300 difference.  She walked away to confirm the price, did confirm, and I walked out of there with a $300 savings.  Now that’s winship!

I do this often with mobile apps on bigger purchases all the way down to boots.  Its simple to do and it works.  I believe that if these brick and mortar corporations want to survive they have to adapt.  Hell us traders have to adapt to current environments, why shouldn’t they.  The way I see it, its a win-win.  I get it now at a cheaper price and they get my business.

 

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