Sometimes doing nothing is the best policy and the last two weeks have been exactly that. There’s been a small amount of portfolio adjustments, but nothing too serious. If I have something more exciting to report, I would have. There isn’t anything. Credit spreads are tiny and investors are generally not being very adequately compensated for risk.
In a “would have, should have” world, Lululemon (Nasdaq: LULU) would have been a short in my portfolio a year ago, but that opportunity has now passed. Coach (NYSE: COH) is also on that short list. Both of these are subjected to confirmation bias by females that I know are into these sorts of things. Both of them are trading at valuations which can (now) be considered reasonable (LULU still being a tad expensive, but not as ridiculous as they were before), but both brand names are clearly on the downtrend. In fashion, trends are everything. Apparently Kate Spade (Nasdaq: KATE) is the next up-and-comer and while traditional valuation metrics say this one is very expensive, perhaps talk to some teenagers that have disposable income and your opinion may change.
No positions, just curious. It makes outlet shopping somewhat more tolerable when looking at these various brands from a purely financial perspective.
I’d agree with this. Kate Spade is very cool right now. Even I am suckered in a bit (I don’t own anything KS though).
This fashion / female bias is also the reason why I refuse to invest in Reitmans even though I keep hearing what a “good deal it is”. The store itself and their sister stores are really not fashionable. I have not purchased anything from them in a good decade or so, and I am an avid shopper. I’d rather go to H&M or Zara over any of their stores, and it’s not because I don’t like Reitmans or their brands (I don’t care, really), it’s that nothing in there appeals to me to draw me in.
Completely agreed on Reitmans. Although being male and completely out of their demographic, the one or two times I did stroll into a store it gave me the impression that they have been squeezed out by simply being too conventional. I have no idea what Prem Watsa (Fairfax) was thinking. There is value in a company with national presence and supply chains, but stripped of loss-generating inventory!