|Dollar Tree, Dollar General, TJX vs. S&P 500 (via freestockcharts.com)|
Look at this chart comparing Dollar Tree, Dollar General, TJX (owner of T.J. Maxx), and the S&P 500's performance since October 2007! That's why he said "we spent $5 trillion to get this and we shouldn't congratulate ourselves." His overall reasoning makes sense.
- Household net worth is down 40%;
- Consumer income is down 10% over the last few years;
- We are going through the worst housing crisis since the great depression;
- The jobs numbers are terrible;
- "Earnings this quarter are going to be the worst in years. It's going to get worse in the next two quarters, and then worse after that." ("top line is bad, bottom line is bad)
I remember he always said the luxury space was performing well, but this time he said he was "starting to see some softening in the luxury space" (Burberry, Tiffany's), which was interesting. He mentioned that Dollar General, Family Dollar, Dollar Tree, TJ Maxx (TJX), and Ross Stores have been the obvious winners in the retail space during the ongoing great recession. Here's a chart showing how Dollar Tree (DLTR), Family Dollar (FDO), Dollar General (DG), Ross Stores (ROST), and TJX have been dominating their competition (Kohls (KSS), JC Penney (JCP), and Sears (SHLD)) ever since the market bottomed in March 2009. In his other Daily Ticker interview, see what Davidowitz said about hedge fund manager Bill Ackman's activist investment in JC Penney, and how Edward Lampert's activist investment in Sears ultimately got destroyed after its nice pop in 2004-6. He thinks these activist hedge fund managers should focus on managing money instead of running huge businesses.
|Kohl's, Sears and JC Penney vs. Ross Stores, TJX, Dollar Tree (via: freestockcharts.com)|
Source: Yahoo Finance's Daily Ticker