Wednesday, April 4, 2007
Having posted weak sales for January and February, the retail sector is finally bottoming out...
Retailers will be closing the books on March sales on April 7, but so far, the month's results have been excellent...
For the first week in March, the Thomson Financial Same Store Sales (TF SSS) Index posted a 4% gain, more than twice its 1.8% return for the same period in 2006. Excluding Wal-Mart, the TF SSS posted gains of 6.7%: more than three times last year's ex-Wal-Mart results.
Retailers are divided in several sectors: discount, department, teen apparel, apparel, and specialty. Looking over who owns the various market leaders for these sectors, you'll notice one name pop up time and time again:
If you don't recognize the name, you've been living in a cave. In addition to his heavily publicized political activism, Soros is widely considered one of the greatest investors of the 20th century. He is best known for managing the Quantum Fund – the single best fund in history. If you'd invested $100,000 with Soros at Quantum's inception in 1969, your position would have grown to $150 million by 1994.
Recently, Soros has been investing heavily in the retail sector, buying the leaders in four of the five retail sectors...
Discounter Wal-Mart (WMT), for example, is currently owned by a who's who of investing legends. In addition to Soros, Warren Buffett, Joel Greenblatt, and investment firm Tweedy Browne have all established positions in the world's largest retailer.
Soros also owns $11 million of department-store standout Nordstrom (JWN), $22 million of teen-retailer American Eagle Outfitters (AEO), and $12 million of apparel conglomerate Limited Brands (LTD).
Soros has been gobbling up shares of retailers since last fall. But there is one holding he's dumped: Recently, he closed his entire position in specialty retailer Pier One Imports (PIR). Even Warren Buffett has lowered his holdings by 51%. In fact, Specialty retail is the only retail sector that the legends are selling.
The retail industry hardly receives any mention in the financial press. I'm thankful for that. It gives us a chance to buy some fantastic franchises alongside the legends, all before the rest of the world finds out. And we get the benefit of George Soros' investing advice without the fees or expenses.
Oil drops 2% on easing global tensions.
Whole world hits new highs: Australia, Sweden, Germany, Italy, Belgium, Netherlands, Spain, France, Mexico, Brazil, and U.K. ETFs all at record highs.
Luxury retailers Ralph Lauren, Tiffany, and Ducati at new highs.