How To Capitalize On This Holiday Shopping Season?
What defines a successful holiday season for a retailer? Sales. How about for an investor? Sales and earnings. Every year around the holiday season I am asked by scores of people how they can capitalize on black friday/the holiday season. My initial response is to advise everyone to go out and interact with their community, enjoy themselves and spend a lot of time with loved ones. When you interact with your friends and family, go to the mall, travel, etc… pay close attention to what the new in-demand hot products are for the holiday season. A few years ago it was the iPod; then the iPhone; one year it was the Kindle; another year it was Elmo…etc. When you walk around the mall ask yourself, what bags are everyone holding? Which stores are the busiest? What’s the “buzz” on the street? What are people talking about? What new product/service do you want? Once you can answer those questions you can learn how to capitalize on the holiday season by investing in the companies that provide those products and services. Here’s a small list of companies that will most likely prosper this holiday season (providing that the major averages hold up).
5 Areas That Will Benefit From Shopping Season:
1.) Apple Inc. (AAPL): Apple has dominated the high-end retail landscape since the turn of the century. Their retail business is thriving while most other retailers are hurting. Their flagship store in Manhattan is the highest grossing store on 5th avenue! That’s impressive! Apple’s products are superior to their competition and remain in-demand. Their sales and earnings are strong which are all reflected in AAPL’s chart!
2.) Amazon.com Inc. (AMZN): Amazon continues to stand above its peers as it remains a leader in the online retailing space. The company offers great products at attractive prices. Amazon’s Kindle revolutionized the way people read books and will be a hot seller this holiday season. (Full disclosure, I love to read and I just got a Kindle for my bday last month- and love it!- and I am not being compensated for any endorsement/opinion in this post). If that wasn’t enough, AMZN does not charge sales tax or shipping (in most cases) which is an added plus for the cost conscious consumer.
3.) Priceline.com (PCLN): Priceline.com is another admirable company which has revolutionized the way people travel. The travel industry is synonymous with every holiday season. What’s better than offering rock bottom prices? Allowing travelers to name their own price. This simple but ingenious concept has helped Priceline emerge as the go-to site for millions of travelers across the world! The stock gapped up and surged to a new high after they reported their third quarter results. This healthy action illustrates how large institutional demand and suggests higher prices will follow for this young and ambitious travel company.
4.) Wal-Mart Stores Inc. (WMT): WMT is the world’s largest retailer for a reason: they know how to sell great goods at great prices! What better way to illustrate their prowess by continuing to increase their earnings over the past several quarters, while most other companies saw their earnings decline. WMT is an admirable company which continues to grow. What else could someone ask for as this holiday season approaches?
5.) Gold/Gold Stocks: Gold is on a tear and most people do not know that it has been steadily advancing for the past few quarters. Even during the bear market gold was one of the only asset classes which did not implode. Crude oil tanked nearly -80% from $147 to $33 a barrel. The Dow plunged -54.43% from its Oct 2007 high to its March 2009 low. Meanwhile, gold “only” fell -34% from its March 17, 2008 high of $1,032 to its bear market low of $682 in Oct 2008. Since then, gold is the only asset class that has recovered its entire decline and has surged to new all time highs! This healthy action (outperforming on the way down and up) illustrates how strong this market actually is. That said, how can someone capitalize from this action? Easy, buy Gold/Gold stocks at the right time. Here’s a small list of strong gold etf’s and stocks. GLD, IAG, ABX, HL, NEM, CDE and JAG. PS: gold also makes a great gift!
Most importantly, spend quality time with loved ones, put your differences aside and spend any down time doing your homework and analyze your activities for the year. Set new goals for next year and develop an action plan to achieve those goals!