retail

Warning sign: retail investors finally join the party

The global equity markets are off to a red hot start and optimism is at an extreme following the tax reform bill to close out 2017. In Davos, billionaire hedge fund manager called it “stupid to own cash.” Last week saw a record inflow of $33.2 billion into stock ETFs and mutual funds according to Bank of America Merrill Lynch. Is this a sign of euphoria and potential warning sign for the market?

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China’s Single’s Day shatters records as the biggest sales day anywhere on the planet

Black Friday and Cyber Monday are famous in the US for the big discounts and therefore big spending. In China, they created their own version called Single's Day — on November 11 or 11/11, which began as a protest of sorts against Valentine's Day, propelled by college students in the 1990s. To show the incredible buying power of the Chinese consumer, in just the first two minutes of shopping, over $1 billion was spent at Alibaba alone and by the end of the 24 hours, Alibaba's sales hit a record of $25.3 billion, more than 40 percent higher than Singles Day 2016. Yes 40 percent growth! JD.com, the #2 retailer in China, sold $19.1 billion!

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Costco’s price advantage is its moat vs the Amazon effect

On June 15th, Costco stock was trading at $180. The next day Amazon announced its deal to acquire Whole Foods which sent supermarket stocks and Costco shares tumbling. Investors feared that Amazon would destroy the supermarkets much like it did with bookstores and electronics retailers. If retailers don't adapt or have some kind of advantage, then they very well may fall by the wayside. However others will adapt and thrive. One such case is Costco who carries a huge value proposition that Amazon will struggle to combat.

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Death by Amazon is greatly exaggerated

Back in 1999, I was covering technology IPOs for CREF Investments. The theme was that brick and mortar stores were going to be crushed by online retailers. All you needed was eyeballs on your website and your stock would go up 10% per day. It was a crazy time. The theme would turn out to be a good one but way too early and most of the companies that I saw during that period are now bankrupt.

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Amazon Is Everywhere

While in Manhattan for meetings recently, I walked past this shelf of Amazon packages being prepared for delivery.  While, I admittedly have my fair share of Amazon boxes at home and the office, seeing it at this scale was eye opening.  From watching Amazon Fire TV to my kids streaming Amazon Prime cartoons to asking Alexa to check today's weather forecast, Amazon.com, now in its 20th year as a public company, is everywhere.

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