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NEW YORK ( TheStreet) -- Jim Cramer made an excellent point Friday night on his Mad Money television program on CNBC, noted here by Scott Rutt of TheStreet:
Make no mistake, the indecision in Europe will cause a global recession, and no one is immune to this crisis ... [However,] Cramer said there are still bull markets out there, albeit small ones, and there are still companies immune to Europe's woes.
Though Cramer might not share my overall sentiment, he did call out
Lululemon(LULU - Get Report), which reports earnings Thursday, as one company to keep an eye on. He argues that a strong report from LULU could propel other growth stocks.
I agree. And I also add another angle to consider as LULU gets set to report.
I am long and quite bullish LULU. I tend not to like being long this type of stock, particularly via options, ahead of earnings. With LULU, I make an exception.
I have faith in CEO Christine Day's retail strategy. No discounts. Limited inventory.
Speaking of inventory, the company spooked Wall Street a bit, as inventories
increased more than 80% between the end of the 2010 and 2011 fiscal years. Because I have as much faith, if not more, in LULU's affluent target customer, I expect her (and him) to have gobbled up that inventory over the last several months . . . at, for the most part, full retail. This equals massive revenue and profits.
I live amongst loyal Lululemon shoppers. I take Spinning class with many of them several times a week. I check stores frequently in Santa Monica and San Francisco. In both cities -- and in dozens of other places like them -- the Lululemon logo is on the streets. This is not a fad for the fickle; it's here to stay.
It's a dynamic similar to the one that keeps
Apple(AAPL - Get Report) humming along.
Apple achieves high societal status. Like LULU, Apple products are aspirational to many. But it is absolutely not a fad.
Silly bandz. Japanese erasers. Pillow pets. These things are fads among an unreliable set of buyers. (Ask my eight-year old).
Beautifully made products that serve practical and psychological needs are hardly fads. Apple and Lululemon have made the connection; they're both officially part of their core customers' lives.
And, most importantly, this is a customer that either does not care or tends not to need to ask how much something costs. Walk along shopping streets in cities where the affluent reside. You'll ask yourself, "
What economic uncertainty? and
Is there really a chance of another recession?" Not here. At least not among the urban and semi-urban "elite," for want of a better word.