Where does retail fit into all of this? Talk about a tough call. You have the high-growth retailers, which trade as a function of the bonds -- they rally through multiple expansion when rates go lower -- getting slammed. (We just bought some Wal-Mart (WMT) - Get Walmart Inc. Report off the slam, for what it is worth, betting on a bounce.)
You have the no-growth companies, the
igniting, as they do well when the economy is booming and they surprise themselves to the upside.
You have the Net theme, which must be so hurting those bricks-and-mortar companies that even
acknowledges you have to be careful in the area.
There are the secular growth stories off of DVD:
. And the secular decliner off of mail order,
off of disorganization.
And there are the special situations: toy stores off of
off of the self-tender.
In short, "retail" as a play isn't working. When
downgraded a bunch of high-growth retailers the other day, the call had huge impact.
But the better call would have been to buy the down-and-outers.
My conclusion: Retail, too, has to be viewed through a cyclical prism.
If you think the Me-Bizarro-Me-Like-'Em-Ugly Market will continue, then you buy Penney and
. If you think we are about to return to The Stocks Everybody Loves, go buy some
I am from the
school of investing: I want to find the
of retailing and avoid the
. Then I can make money in the daytime and sleep at night. But if the great ones get too smashed -- witness Wal-Mart -- we swoop in for the surgical buy.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Wal-Mart, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at