How to profit from the ‘death’ of Black Friday

From Nick Rokke, Analyst, Palm Beach Daily:

An American tradition is dying… But a new one is taking its place…

For as long as I can remember, the Friday after Thanksgiving has been the biggest shopping day of the year. But I didn’t realize how far back the tradition went.

It goes all the back to 1924, when Macy’s hosted its first annual Thanksgiving Day Parade.

The day after the parade—when the stores reopened on Friday—owners saw a huge increase in shoppers… For almost 100 years since then, shoppers have filled stores on Black Friday.

Until this year…

That’s when the stores on Black Friday appeared empty. You can see the pictures of all the empty stores with one quick Google search.

I saw this firsthand myself on Friday afternoon. I went to an outdoor mall and Sam’s Club in South Florida. Both were surprisingly quiet. Others from our office found nearly empty Targets and Walmarts, too.

The mad rush on Black Friday to Best Buy and Walmart is waning.

But that doesn’t mean retailers are dying.

In fact, retailers are on pace to have the biggest holiday season ever.

Instead, “Couch Friday” and “Cyber Monday” have replaced the traditional start of the holiday shopping season. (It’s estimated that Americans spent $6.59 billion on Cyber Monday. That’s the largest digital shopping day in U.S. history.)

Here at the Daily, we dig beneath the headlines to see what’s really going on. And often, what we see is the opposite of what’s portrayed in the media.

Yesterday, I told you why the economy is doing great. More people are working now than ever before… And they’re making more than ever before.

And they’ll be spending all that money shopping at retailers (traditional and online) for the holidays.

In a moment, I’ll show you how to get in on this shopping spree…

Use Fear of a Retail Apocalypse to Profit

All the talk about the “retail apocalypse” has pushed retail stocks down this year.

But here’s the thing… Retail is never going to go away.

People will always shop. But how they shop changes. And that will create new winners and losers. And right now, retail overall looks like a winner.

We told you on September 28 that retail was a bargain (and it still is). Since then, the SPDR S&P Retail ETF (XRT) is up 6%.

This trend is just getting started.

Retail is one of the cheapest sectors in the market. The price-to-earnings (P/E) ratio—how much investors are willing to pay for each dollar of current profits—is only 18

That’s compared to the average of 22 for the S&P 500. That means retail is trading at a 18% discount to the overall market.

Smart investors are starting to take notice. And they’ve driven prices up a little. But the masses haven’t caught on yet.

Investor sentiment is turning positive in retail stocks. And as it does, I believe XRT will retest its highs from 2015.

That implies a 15% rise from here. I think that’ll happen by the end of April when retailers have posted year-end results.


Nick Rokke, CFA

Crux note: Retail stocks aren’t the only ones poised to rise higher next year. The next 1,000%-plus gain will happen on America’s first “new stock exchange” since 1971.

Already, over 900 companies have begun listing “shares” on this new exchange. Shares you can buy TODAY for as little as $0.01. And they’re making gains unlike anything we’ve seen in the U.S. stock market in decades… 852% in 10 days… 1,400% in 60 days… and 6,333% in two months.

But the window to profit from this new exchange will shut on December 31. Find out why here

× Subscribe to Crux
Want more posts like these?
Like us on Facebook?
Crux Contributors