The Day Ahead: The Reckless Club

 | May 08, 2013 | 8:00 AM EDT
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The wind is blowing hard on the Street. It's not so much the hot air, but the consensus view that the sole direction for risk assets is upward. I mean, it got so silly Tuesday that I tweeted the Dow was a mere 32.9% shy of 20,000! Is the thought so far-fetched that such a goal could be reached by the end of 2014 if present conditions persist? Can we lock in on another 15% by the finish of 2013? Gosh, who knows? But the general feeling out there is that stocks are wearing a suit of armor.

Profit-margin direction has become irrelevant. Earnings season has morphed into such a full-fledged joke that the Securities and Exchange Commission should be pondering twice-a-year performance disclosures. The market laughs at stock downgrades -- in fact, downgraded stocks are bought! Companies that have struggled fundamentally in the past six months, such as FedEx (FDX), receive bids simply because of the "rising tide lifts all boats" phenomenon.

Meanwhile, banks are leading despite a dreadful outlook for net interest margins in a low-interest-rate world. I for one am frustrated that the stuff I learned in college, and am still paying for, basically no longer holds water. The rage runs so deep that I recently ripped the top off a Red Bull can with my teeth and felt no pain.

Since throwing caution to the wind appears fine and dandy, as everyone else is doing it, I will join the reckless club. First, here are a few market-related charts to that collectively support the resounding bullishness that is being stuffed down our throats. Second, here a stock pick -- 'cause why the heck not? Right?

#GeekChart Time

Take a glance at the fancy red circles in the chart below -- the S&P 500 and the relative strength index. The recent past suggests up, up and away!

S&P 500 and RSI

Source: Belus Capital Advisors

Whoopsie, Money Rotating Out of Wal-Mart

I suppose a rock-solid holiday season is forthcoming. Wal-Mart (WMT) shares reflected economic weakness in the first quarter but, by the holiday season, all will be OK.

Wal-Mart (WMT) -- Daily

Source: Yahoo! Finance

The One Retail Stock to Own: Urban Outfitters

On Tuesday morning I remarked on Twitter that Urban Outfitters (URBN) is the retail stock to own at this juncture -- and, an hour or so later, a sell-side analyst hiked estimates. It was a coincidence, of course. By no means am I enamored with retail names right now, as a host of earnings and guidance bombs are lurking for the first quarter, thanks to weather.

However, throughout the quarter, the frequency of Urban Outfitters' promotions has been significantly lower than that of its peer group -- especially at the Anthropologie division. Both this chain, and the Urban Outfitters division, are finally delivering consistent assortments to consumers. Teens are digging Free People, as well. As a result, and with the improved weather now unleashing pent-up demand, the company's stores are poised to benefit handsomely.

An Honor

Away from all this, on Tuesday my company had a special moment. My lovely COO Carlton pulled some strings and, as a result, we were able to ask the first question of Warren Buffett in an exclusive interview with Levo League. This interview -- which was focused on career, life and females in business -- was extremely inspirational, and I am glad I got off a call with Target (TGT) to watch. Mr. Buffett seemed to thoroughly enjoy discussing bigger ideas, instead of the tired stuff regarding book value and succession-planning.

You can watch the entre interview here.

In the meantime, here the top three inspirational quotes from the interview:

  • "Almost everything that looked like a failure in my life turned out to be a success."
  • "Just find your passion."
  • "If someone is going to be unfair with you on salary, they will be unfair with you in 100 other ways."

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