Payne’s Passion: Where True Freedom Begins
May 26, 2017
I think poverty to a large extent is also a state of mind. You take somebody that has the right mindset, you can everything from them and put them on the street, and I guarantee in a little while they’ll be right back up there. And you take somebody with the wrong mindset, you can give them everything in the world, they’ll work their way right back down to the bottom. – Ben Carson
Despite the howls from the left, I think Dr. Ben Carson is spot on… I’ve seen it first-hand. And I think it brings up a point worth remembering this Memorial Day weekend as we honor those who lost their lives defending America.
Growing up, I saw glimpses of poverty when I visited the South. Amid the poverty, I mostly saw upbeat folks who worked hard and who looked forward to things getting better.
At the age of 12, I moved to Harlem with my mother and two younger brothers. We arrived penniless, and we all lived in the same bedroom. This is where my big epiphany about the harsh realities of life, including the responsibility that we all owe it to ourselves to change our own condition, came from.
You can despise your situation but you need to resolve to get out of it.
The keys come with this gift we call life. However, if you’re defeated inside and the only thing you cling to is victimhood and woe, then even good fortune can be squandered.
I have so many friends who grew up in Harlem and the Bronx who might be upset with Carson’s words. Yet business owners, construction workers, bus drivers, engineers and law enforcement works actually proved his point. True freedom and prosperity begin in our minds and souls.
Back to the Stores?
If you’re like a lot of folks, shopping may be among your activities this holiday weekend. The retailers are certainly rolling out the sales. I think we’re seeing a resurgence in this group right now. In fact, the biggest winners yesterday were the brick-and-mortar stores. Best Buy (BBY) rallied 21% on a huge earnings beat, driven by success in video games. Other big retail winners included:
- PVH Corp. (PVH): +5%
- Ulta Beauty (ULTA): +4%, and it’s up another 4% today
- Netflix (NFLX): +3%
The following names haven’t figured it out yet, but still exhibited signs of life:
- Sears Holdings (SHLD): +14%
- Guess’ (GES): +14%
After the close, Costco (COST) popped on its update on comparable store sales. Deckers Outdoor (DECK), maker of Uggs, surged 13% on strong earnings and guidance. Big Lots (BIG) also popped in after-hours trading.
For now, it’s clear that people are picking up their spending at restaurants and brick-and-mortar retailers. I think this will hasten takeover activity in the industry. There are smaller and more desperate names that will probably see deals happen, but the risk-reward ratio (potential upside versus going out of business) is still too high.
The following names make more sense right now:
Monster Beverage (MNST) is perennially in the rumor mill, but energy drinks have overcome negative stories and continue to grow while carbonated sodas keep slipping.
Abercrombie & Fitch (ANF) may have bottomed after its arrogant CEO made elite comments about people’s appearance. This store was not always about being hip. It could reinvent itself again, but it might be easier with private ownership.
Coach (COH) is suddenly hip again, and that puts it in the eye of potential buyers. The company itself has been on an acquisition spree, but perhaps that’s to make it an even more inviting target.
Regardless, I’ve got my eyes peeled, and you can be sure we’ll be jumping on the right opportunities in my Smart Investing and Smart Trader newsletters.