I always enjoy writing about retailers. Partly because one uses the retail sector most days and can factor those experiences into investment decisions. And because investing in emerging retailers relies on spotting management that excels at anticipating consumer needs.
Also, the “herd” tends to oversell or overbuy retail stocks, based on top-down trends. Fearful of declining retail sales growth, the market thumps retailers en masse, even though there are always winners (think Aldi) and losers (think Myer Holdings) when consumers struggle and change spending habits.
Some retail stocks have delivered soaring returns this year despite never-ending gloom about consumer weakness and rising competition. Electronics retailer Kogan.com has a 163 % total return over one year. Fashion jewellery retailer Lovisa Holdings is up 61%.