February 26, 2008
This week kicked start retailers reporting season. We have Lowes, Home Depot, Targte and more still on dick to report their numbers. Overall they are reporting horrible earnings figures with the exception of Wal-Mart, yet all them are rallying. Wal-mart is profiting at the expense of others, as most consumers are switching to the cheaper Wal-Mart to buy their goods.
The economy is facing a rescission, the consumer is tapped out and can not spend any more and businesses can't borrow to expand even if they have good earning growth potential. So are investors looking past all this into the potential recovery? Or may be the government stimulus package could hit the retailers profit statements by the next 2 quarters?
May be, who knows, markets act in strange ways. Sometimes I think that bond investors are much smarter than equity investors as they tend in general to price risk much more correctly.
Actually it is sour grapes on my part as I wanted more time to evaluate and buy few retailers while they are down but tomorrow may bring another day.