InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

$1,230 in Instant Income?

$1,230 in Instant Income?Our top income expert recently pulled the wraps off his breakthrough moneymaking technique. And he proved beyond a shadow of a doubt how you can use it to generate instant cash payouts of up to $1,230 (or more). Over and over again. But then he took things a big step further and guaranteed you can make $1 million by following his program. And the second he did, our phones went nuts! Space is limited — get the details here.

 

 

Why Black Friday Doesn’t Matter

By Robert Frick on November 20, 2015

A week from today we’ll be waking up stuffed with turkey and regret. “Was that second piece of pumpkin pie really necessary?” And, “oh gosh, it’s almost noon and I haven’t rushed to those Black Friday sales and done my patriotic duty to support the economy.”

I admit I once factored in holiday-shopping projections and post-Thanksgiving surveys into my view of the economy. After all, what better barometer of consumer confidence is there than measuring mob mentality, post-Thanksgiving?

But as satisfying as a Walmart stampede is, schadenfreude-wise, and as compelling as those early shopping stats are, they carry as much weight as a snowflake. 

Black Friday Falderal

Our brains crave certainty and hate ambiguity, so we’re eager to fill in vacuums with information no matter how dubious.

When it comes to holiday retail sales, money manager and commentator Barry Ritholtz nailed it last year when he said they’re “a combination of a retail trade group that cares little for accurate economic data, a terrible survey methodology and a naive and lazy news media, which seems to believe its role is to mindlessly repeat whatever nonsense is peddled by the aforementioned trade group.”

The trade group in question is the National Retail Federation, which is projecting sales in November and December (excluding autos, gas and restaurant meals) to increase “a solid 3.7%.” Sometimes the NRF is close, sometimes it’s not. In 2012, for example, it predicted a 4.1% increase, overshooting the actual 3% by a wide margin.

The NRF also said that the last Black Friday was a disaster, with sales down 11%, which was dutifully reported by media from the New York Times to the Wall Street Journal. Was it such a disaster? That’s hard to say, given that figure is based on notoriously inaccurate surveys of shoppers. And sales over the Black Friday weekend are no indication of total holiday sales, a fact proven repeatedly, including by this chart tweeted by Jim O’Sullivan, the chief economist at High Frequency Economics.

Holiday Retail Sales

An Important Measure

How consumers are spending is an important measure, of course, especially these days. We’re all waiting for lower unemployment to translate into stronger spending, which will be a meaningful measure that this recovery has moved beyond tepid.

Based on real numbers, not holiday-spending, hocus-pocus forecasts, we’re still stuck at tepid:

  • The Census Bureau said retail sales in October rose just 0.1% from September, below economist predictions. That sank many retail stocks when the figures were announced last month.
  • The consumer discretionary sector is only holding its own, at best. Department stores, including Target, Walmart and Macy’s, aren’t reporting strong sales. In a recent report, brokerage Charles Schwab said that while “the American consumer has shown a remarkable ability to overcome obstacles … we believe the discretionary sector’s performance will be more muted in coming months.”
  • Consumers are nervous. Gallup’s Economic Confidence Index shows we remain more negative than positive about the economy.
  • Plus, we still have a fairly high level of credit card debt, down only a bit from a peak in 2008, when we were charging to keep our heads above water during the Great Recession.

To these numbers we can factor in holiday spending to get a more complete picture—but let’s wait until January when the actual numbers are released.


You might also enjoy…

 

Obscure Tax Law Forces This Company to Pay Out 90% of its Profits

A 50-year-old loophole is forcing one company to pay out $9 of every $10 it makes from ironclad contracts with the U.S. Government.

In fact, over the past seven years, it’s made payments ranging from a few dollars… to tens of thousands of dollars… 30 times. Without a single cut! 

Most folks don’t even know this company exists, but the ones that do are making a mint.

Like Ted B., who’s set to receive a check for $1,096 just a few days from now.

Merrill H., a 58-year-old from New York, has collected over $3,385 so far. 

And retirees Beth and Terry P. have raked in $16,555.

I’ve put together a special report that will give you all the details, including simple instructions on how to get your name on the payout list before the next cutoff date.

You can get your copy here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.