General portfolio thoughts leading up to US Thanksgiving

This week is the US Thanksgiving, where non-discriminating consumers go crazy purchasing tangible objects under the perception that they are discounted.

It is quite apparent, however, that floor retail is getting smashed by online retailing. This has been my underlying theory for quite some time and leads me to the theory that avoiding retail-heavy REITs such as Riocan will be a money-saving procedure. If you can’t compete with Amazon, then the entire structure of your business should be examined.

What’s going to be interesting is if this Amazon-ification of retail will impact corporations like Walmart – certainly their equity is being eroded by Amazon, but I think there is a limit to the erosion where people will simply want to look at tangible stuff in a consolidated warehouse environment. The success of Costco is an example of this – eroding Costco would be the holy grail for Amazon and Walmart, but even Walmart couldn’t pull it off with Sam’s Club.

I have been looking for distressed entities and right now anything resource-based (especially energy) is clearly stressed. I still do not find a lot of value in this sector, but there are ancillary businesses that seem to be a case of throwing the baby out with the bathwater. Anything related to bulk dry shipping is also getting killed, but most corporate entities that are publicly traded come from Greece, and this is a country I do not want my money invested in for a lot of reasons.

I still remain relatively defensively positioned. It is odd how my normal investment patterns is to go for capital gains and growth, but every component in my portfolio right now is giving off a substantial amount of income. There will probably be a time to shift to growth but it doesn’t appear that now is that time.