- the current enthusiasm for retail names;
- the media's misinterpretation of what's happening in housing; and
- the unheralded bank rally.
Ride the Retail Wave?
Posted at 9:45 a.m. EST, Friday, Dec. 23 The oscillator is too high. The sentiment is very bullish. The animal spirits may be ahead of themselves. And Jo-Ann Stores ( JAS), an undistinguished operator of craft stores, gets a humongous, $61 bid from a private equity outfit, up $16 from the day before. Isn't that the real issue in a nutshell? When we think that the optimism gets too unbridled, particularly in retail, which isn't aided by a lot of job growth -- today's number showing just a little positive bump -- when we want to ratchet back or take profits in a segment that seems overextended like the Retail HOLDRs ( RTH), we get a bid that has us scratching our heads. Jo-Ann Stores isn't anything terrific. In fact it's a lot like Michael's, another P/E takeover that I always thought was doing badly! Looks like it can't be. And I haven't see that Toys''R''Us deal, so I figure that, too, can't be doing all that great. > > Bull or Bear? Vote in Our Poll Yet Jo-Ann Stores is now worth a ton more than yesterday, and I want those points, just like I wanted the points you got from J. Crew ( JCG). Plus, last night Bed Bath & Beyond ( BBBY) delivered a terrific quarter, so it's not just takeout that has me hunting through the group. ( Good article on the free site about retail takeovers running rampant.) The Bed Bath & Beyond was so good -- and consider that it was the second excellent quarter in a row after a quarter earlier in the year when the company had been quite bearish -- that I am thinking, Wait a second, darned the retail torpedoes, full speed ahead. That was a magnificent quarter from Bed Bath & Beyond, with excellent expansion of non-Bed Bath & Beyond stores -- particularly the Harmon discount drug stores, a better operator than the skyrocketing Walgreen ( WAG) -- and a nice accumulation of cash to do another couple billion dollar buyback. So, what are we supposed to do? Play the antisentiment, antioscillator game and boycott the market? Or find more Jo-Ann's and Bed Bath & Beyonds. I think the latter. At the time of publication, Cramer had no positions in the stocks mentioned.