Once they crack something, it stays broken -- and it stays broken for a long time.
I am thinking about the way all dollar-store stocks have been crushed ever since Dollar Tree DLTR said things had gotten weaker. This group had been among the strongest sections of retail. It had been THE way to play the weak consumer.
Suddenly, though, the consumer's considered robust and able to gravitate from Dollar General DG and Dollar Tree (the really hammered players) and go to Wal-Mart WMT or Target TGT .
What's incredible about the move out of these stocks is that it really doesn't matter what the companies say from now on. They can't rebut the presumption that business is going to get bad.
What's ironic is that many of us have seen this movie before. It's what caused Dollar General to go private in the first place. The total disrespect the stock's getting now is reminiscent of that what happened back then.
More important, once a stock without yield falls out of favor in this market, it's "Katy bar the door," especially when there is a rotation into the industrial names and the high-end retailers.
In other words, when these stocks start going down, it becomes very difficult to reverse.
They are one more reason why I am drawn to dividends, which provide a break from this kind of selling that is so vicious that it can't be gotten in front of. They make it mighty hard to own anything that's out of favor because once out of favor, there's no stopping the decline.