Was Black Friday A Bust?

“We believe Thanksgiving shopping was a bust,” said analysts at SunTrust Robinson Humphrey in a note. They conducted channel checks in the New York metro area, New England and the Southeast region starting on Thanksgiving Day and throughout the night into Black Friday.  LINK

Retail sales fell .9% last December.  Currently the trend is not the friend of the consumer retail sales bulls (click on image to enlarge):

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SunTrust retail analysts are already declaring Black Friday to be a bust.  Of course, our first clue this was coming was when the “Black Friday” sales events started two Mondays ago.   Anecdotally, I did some “boots on the ground” due diligence today (Black Friday) and found the stores to be eerily quiet.  And Denver is considered to have one of the healthier regional economies.

The bottom line is that the consumer is tapped out.  Obamacare premium rate hikes are starting to show up in mailboxes and that should really put a damper on holiday spending plans.

I have a new research report format that I am going to transition into a monthly newsletter service. The reports will have a couple ideas for making money – mostly by shorting or buying puts.  My first report featured two retail stock shorts.BlogLOGO_retail  One of them reported last Tuesday and anyone who read my report and shorted this stock ahead of the close on Monday (November 23), made a quick 16-20% the next day, depending on when and if they covered:

Untitled2This stock still has plenty of downside left, as it sells into the middle/lower-middle income demographic, which has been particularly squeezed since the 2008 financial crisis.

My second idea in this report will release its earnings next Thursday (December 3).  This stock, in my opinion, has a very high probability of missing its earnings and doing the “earnings miss” cliff-dive. Untitled3 It also has active options and my report has suggestions on using puts to play this stock.  It sells into the late teen/early 20’s demographic primarily – you get the idea:

I think this stock could easily drop 12-15% if it reports an earnings miss next Thursday.

You can access my report on these two stocks here:   Short Seller’s BlogLOGO_retailJournal – Retail Stocks  This is a new 2-page per stock idea format, with an overview of each company, reasons why I think the companies will miss earnings and why they make excellent risk/return short term trades or longer term short positions.

 

3 thoughts on “Was Black Friday A Bust?

  1. Yesterday I bundled up and headed out among throngs of consumption zombies armed with cash and plastic, mentally prepared for hand-to-hand combat and ready to shove my way through the crowds in order to get my bargain. When I arrived, much to my surprise, the shops and stores were virtual ghost towns with not a soul around. I thought to myself, did I get my days mixed up, is this not Friday? I double checked my smartphone to confirm and sure enough, it was indeed Black Friday. I opened the door, wandered through the empty store, proceeded to the counter, and I found every single item was on sale, in fact, just the evening before every item in the store was marked down even further than before, and the place was already offering their merchandise at a huge discount. It was as if as if the store was going out of business or something. It was the sale of a lifetime, yet no lines, no crowds, no desperate shoppers pushing and shoving … I was the only person in the place. So I loaded up on gold and silver bars and coins, and headed home. I really don’t understand what all Black Friday fuss is about. There was nobody out shopping yesterday.

      1. I’m 1,300 miles NW of you.

        BTW – in case you didn’t catch my slightly sarcastic, tong-n-cheek comment … I was Black Friday shopping at a coin shop. That’s why the place was empty … because nobody around here is interested in the merchandise in that store.

        I find it ironic how people are jubilant when clothing, big screens, and toasters are marked down 50% off, but when we have Black Friday 50% off sale on gold everyone gets depressed and stays home?

        Like the Chinese, I’m exchanging my fiat paper for gold as fast as I can. I’m still in an accumulation phase, so personally, I’m quite happy to get the stuff on sale and am a huge fan of unregulated markets and price suppression schemes 🙂

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