Can we just stipulate that retail's crazy and perhaps totally un-investible?
The specter of Amazon (AMZN) is everywhere. No one knows where the giant squid is going to strike next. Portfolio managers are scurrying from the group again after a few days' hiatus, in large part because Amazon is going to report tomorrow and the company may give an inkling about its next target.
How bad is it out there? Let me count the ways. For ages, club members who belong to Action Alerts PLUS have known I have a fondness for Walgreens (WBA) . The company's done everything right, creating the best worldwide drugstore chain, a business that is growing and even thriving in this environment because of the blast-off of prescription drugs courtesy of the federal government's intense largesse to the pharmaceutical industry.
We told club members to sell some WBA when it ran up on the news that it would buy Rite-Aid (RAD) and we feared the government would block it. That was prescient.
What wasn't prescient, though, was our inability to recognize how much investors fear that everything Walgreens sells, including its home-run prescription drug business, could be obliterated by Amazon. I think Walgreens will not be able to get its premium multiple back.
I think the same thing's true with Costco (COST) . It's amazing how well Costco is doing, just as amazing as how people think it won't be doing when Amazon combines with Whole Foods (WFM) .
The one that really sticks in my craw, though, is TJX (TJX) . This is the company that benefits the most from the destruction of traditional bricks-and-mortar because of closeouts. (TJX is part of TheStreet's Action Alerts PLUS portfolio.)
It doesn't matter, though. It's retail.
Too crazy.
At least for now.
