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John Reese is considered an expert in the systematic investing methodologies of legendary investors, including Peter Lynch, Ben Graham, Warren Buffett and many others. He has been active in the development of fundamentally-based quantitative models since the mid-90s. His commentary and research... More
My company: / Validea Capital Management, LLC.
My blog:
The Guru Investor Blog
My book:
The Guru Investor: How to Beat the Market Using History’s Best Investment Strategies
  • Gurus on a Roll with Retail 0 comments
    Mar 23, 2010 1:13 PM | about stocks: UNTD, ARO, ROST, GME, JOSB, JAS, TJX, BKE, AMZN, CASY

    Throughout the Great Recession and the ensuing turnaround that began in mid-2009, many analysts and pundits have said not to expect much help from the U.S. consumer in the economic recovery. Hamstrung by debt and at the mercy of a weak job market, Americans are going to save more and spend less, the theory goes, and weak consumer spending -- which makes up about 70% of the U.S. economy -- will mean weak overall growth for the country.


    But in recent months, the U.S. consumer has shown surprising resiliency. According to the Census Bureau, retail sales have risen in each of the past two months, and now stand close to 7% off their December 2008 lows. Some of that is due to bounce-backs in the price of gas and fuel, but other more discretionary-type industries are also well off their lows, including clothing stores; sporting goods, hobby, book, and music stores; and electronics and appliance stores.


    That strength has been a boost for a number of retail-related stocks, and my Guru Strategy computer  models, each of which is based on the approach of a different investing great, have done particularly well in that arena. As part of my new Validea Professional product, I track a number of industry and sector portfolios on that use my guru-inspired models to find the top investment ideas in each area. Over the past month, my 10-stock Retail portfolio has been the best performer, gaining close to 17%, more than three times the gains of the S&P 500.


    My Retail portfolio also had a stellar 2009, gaining 61.2% vs. the S&P's 23.5% gain. Right now, it's particularly high on apparel retailers, which make up half of the portfolio. Here's a look at all of its holdings, which include big recent winners like Ross Stores (up 24.8% since Jan. 22) and The Buckle (up 27.3% since Dec. 24).



    Disclosure: I'm long UNTD, ARO, ROST, GME, JOSB, JAS, TJX, BKE, AMZN, and CASY.
    Themes: John Reese Stocks: UNTD, ARO, ROST, GME, JOSB, JAS, TJX, BKE, AMZN, CASY
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