Do we like the great outdoors? Or can we do without it? Is biking something best done indoors as part of an ecosystem, or indoors as part of a class or outdoors as part of the wonders of nature? Or not done at all? Is barbecuing endlessly fun or are we so sick of it we will never do it again and would rather wait an hour in line at a Texas Roadhouse (TXRH) if we don't have to clean up?
For months we have been playing a guessing game about what will people do when they are vaccinated. Will they go back to the office? Will they stay at home and work? Will they save, will they spend?
I think it's becoming clear now, though, that all bets are off. We don't know what people will do. In fact we don't even care. Let's find things that aren't up so much that have good year-over-year comparisons and let's let the other stuff go. Now that so many stocks have moved already, it's just too hard to figure out. We just don't know what people will do.
But what we do know is that there is so much new money in the system that they will do something, something different and your goal is to find something that will be done NO MATTER WHAT if it comes to people who have more money than they had before and finally some options to do something with it.
It's a short list. For example, right now I can only count two retail stocks that went up during the entire guessing game between essential and non-essential and that's Lowe's (LOW) and Home Depot (HD) . Why?
Because in lockdown you had to reinvent your house. You had to make bedrooms into offices and schoolrooms. You had time to fix up your place yourself.
Now, with lockdowns ending, you find that your home is your most appreciating asset. It's no longer an expense that must be made. It's a capital improvement that can be made. So investors are saying don't make me choose between Kohl's (KSS) and Walmart (WMT) . Just give me some Lowe's so I can improve the value of my house. And yes I like Lowe's more than Home Depot here because I sense that Lowe's is catching up to Home Depot in so many ways now that Marvin Ellison, the CEO, has hit his stride.
Plus, with gardening season around the corner -- the equivalent of Christmas for these two -- the numbers could be extraordinary.
If you want your place to look better and each room to be nicer than it was before you go to Williams-Sonoma (WSM) or RH (RH) depending upon what you can afford. The former is just crushing it with every single one of its retail extensions, not just West Elm. Watch the flagship brand, Williams-Sonoma, now that the mall is opened and the company has closed the underperforming stores.
RH has become a publicly traded way to cash in on how much wealth there is right now, wealth that's dedicated to those who don't want to pay a decorator and want to be sure they are spending on the right things. The fact that it is about to design homes in Aspen that aren't even on the drawing board and there are multiple buyers tells you all you need to know about RH's numbers.
I think these two work because the exodus out of the cities is not over. It's the same reason that I think Tractor Supply (TSCO) works as those people who moved out to the country aren't coming back so soon,. And if they do, they aren't going back by public transit. They will come back, sporadically, by car, which gives me one more subset that works: used cars: I like CarMax (KMX) , Lithia (LAD) , AutoNation (AN) and Carvana (CVNA) . With the chip shortage causing havoc among new cars, one of these may be the easiest choices of all.
Don't make it hard on yourself. Don't try to guess on what works and what doesn't with the Great Re-Opening. Go with what works no matter what and in this suddenly treacherous market you lower the odds of making a costly mistake and raise the odds of a long-haul winner.