While some family members will be reaching across the table for a third helping of Thanksgiving turkey, other family members will be pushing back from the table, not wanting to consume too much more tryptophan before they have to wait in line for those amazing Black Friday “blow-out pricing!” sales.
Black Friday. So called because that’s the day when retailers shift from operating in the red (at a loss) to the black (at a profit) due to a high volume of sales.
Black Friday is not a single day. It’s a mindset and a season. Sure, it might have started as a way for retailers to take advantage of the day off sandwiched between American Thanksgiving and the weekend, but Black Friday has become an Event. Retailers advertise Black Friday for all of November. Black Friday sales last through the weekend (“or as long as supplies last!”). And then there’s “Cyber Monday” — a totally made up day when people buy stuff online. I’ve heard rumblings of a follow-up day to celebrate local shops.
And this is just the beginning, of course, since Thanksgiving is the last real milestone holiday until Christmas. So it launches a period of gift-buying… for family, friends, our kids’ teachers… and don’t forget that we also need to get the new clothes for the holiday pictures, plus Jonny needs a costume for the school’s Christmas pageant (or whatever it’s called now in our politically correct world).
Yes, the traditional sin stocks are still selling — alcohol, tobacco, guns, and gambling will still attract buyers during this season. But during the period from November 26 to December 24, the sin is GREED, and the sin stocks are companies like Walmart (WMT), Target (TGT), Walgreens (WBA) and the like.
And the sinners? They’re no longer drinkers, smokers, shooters, or gamblers, they’re mom and dad and grandma and grandpa. They’re regular people like you and I, spending our money to accumulate stuff… stuff we can give away (and stuff that we can keep for ourselves too!)
Here’s what to watch this year: Early reports of household spending plans suggest that this could be an AMAZING Black Friday. I think people have more money than they have in several years, they have more confidence in the economy than they have in several years, and they’re scared of the way the world is going (see: Russia, Turkey, Syria, Greece, ISIS, etc.) and they want to feel better.
Therefore, I believe that we’ll see a record-breaking Black Friday… which means that the “temporary” greed-related sin stocks like Walmart, Target, Walgreens (and so on) should surge from compelling earnings.
Of course, don’t discount the conventional sin stocks that everyone knows and loves — like alcohol, tobaccor, guns, and gambling (and now pot)… but consider whether retailers are (temporarily) the new sin stock.