Retail is on fire and yet the Wall Street traditionalists are missing it because of sampling issues. Consensus analyst opinion believes that Black Friday spending was up only 0.5% over last year. Nobody knows how to interpret the data that showed an increase in shoppers from 172 million in 2008 to 195 million in 2009 but a decrease in money spent from $372 per shopper in 2008 to $343 in 2009. Most suppose that this frugality is the new normal. I’ve got news for all you Wall Streeters stuck inside the box of the last 100 years; it’s time to adjust your measurements of success.
Why would 23 million more shoppers participate in Black Friday but spend less? I’ll give you a moment to ponder... perhaps it’s because they need to look at the products before buying them ONLINE! This is the new normal. So many investors were beaten up during the dot-com crash that they’re missing the real earnings that are finally arriving ten years later. This holiday shopping season will be the one that wakes everybody up from the ten year tech slumber. Online shopping growth is so positive that I'm projecting the Nasdaq will begin its long awaited rise back up to the highs of 5,000. Amazon’s (AMZN) traffic on Cyber Monday was up 44% over last year. Apple’s (AAPL) traffic was up 71% over last year. Are you kidding me? Look at these numbers folks. This rate of change in what should have been typical mature growth data is transformational. As for those Apple investors who are perplexed by the weak price action of the past week, it has nothing to do with fundamentals and everything to do with institutional patterns. You're getting played by the hedge funds.
Depending on which report you read, spending on Cyber Monday was up anywhere from 5% to 16% over last year. I want to alert investors and caution them to make sure any retail report you are investing off of includes a proper weighting to companies like Apple and Amazon. Amazon attracted 15% of the total traffic on Cyber Monday and yet they are left out of most broad retail reports. We live in a world where distribution is readily available and there is no reason for consumers to mess around with companies who are second or third best. The best of breed are taking even more market share. I have my own ideas of what the real retail index should look like and it doesn’t give the old players like JC Penney (JCP) or Sears (SHLD) the clout they currently have. Be careful interpreting traditional data on the new Wall Street. You might get mislead.
Disclosure: long AAPL