After my EXPR experience the other day, I came to the realization that do NOT buy before earnings on any Apparel Store this quarter.
We had a brutal winter, people didn't go to malls, they shoveled snow instead. Especially teenager stores, they go to malls via bus etc, if their parents don't drop them. I don't think that was the case this winter.
I bet 8 out 10 earnings will miss big...
If you play only earnings I say go short... And after it creates a good buying opportunity...
If shorted it, don't hold the short positions more than 6 weeks. It is the American way of living. We will spend additionally and buy things that may not need if they have extra cash.
The weather effect will be a short term impact. As the weather is nicer, people will go shopping and spend and enjoy the extra cash they have saved. Retail and Apparel stores will do so much better on the next Q. I am watching these retailers very carefully, and you know what I do right? I collected them as we go forward. I am holding 154k shares of ARO as I write this.
It is hard to say that the winter had impacted all Apparel Store stores. For instance JCP, jumped 80% since earning report..
If you play these long term as I do, I would say this level is a great opportunity to collect. As ARO, it has $150M injection, shorting it would be a big mistake you can make.
I wish I had deep pockets like you here... You are absolutely right when you have the time, money and patience. This strategy works out.
- First of all I don't have the time I play mostly options, so there is an expiration date mostly 6 months that I need to care about.
- Secondly I don't have that kind of buying power, I can add on after each sell offs.
Some of the stocks we talk about it here are my biggest losses of all time,
- DRYS (shipper example)
I only made money on JCP from what we mentioned here because I bought it 3 months after your initial initiation. And it is also far from its 13-14/share levels of last fall.
So if I could effort to sit on a stock for a year and keep adding as it falls, you are 100% right. But unfortunately that strategy doesn't work out for me.
JCP beating earnings had also something to do with the stock was beaten down 20/sh to 5/sh where all the other apparel stores were soaring in 2013. So let's say it was either that or going bankrupt.
ANN is tomorrow before market I'll also have my eyes on it... I may play short on GES, NWY or PSUN earnings next week.