Opinions and observations expressed on this blog reflect the authors' individual experiences and should not be construed to be financial advice. None of the members of this blog are licensed financial advisors. Please consult your own licensed financial advisor if you wish to act on any recommendations here.

Thursday, December 16, 2010

Best Buy and Other Retailers

Suffice it to say that the Best Buy (BBY) warning the other day was a bit of a clarion call for retailers. I've rarely seen a stock in a solid uptrend reverse so suddenly and so severely except in asset bubbles. I would be careful about extrapolating these results across the whole of the retail sector, but I think that the run in retail stocks that we've seen since the middle of the year may have seen its best days.

The sell-off after April was largely based on the incorrect assertion that the consumer was going to lead us back into a recession or at least total stagnation. In absence of that occurring, retailers were largely undervalued. Playing retail as a group in that environment was sensible, but we are now entering a stage where one has to be quite selective. The easy money is definitely already made in this group.

No comments:

Post a Comment