It's Game Time. By Tuesday morning's opening bell earnings from Target, Best Buy and ON will have set the stage for the coming flood of retail earnings... if you know what to look for. How to get ahead of the wave. 

It's time to get serious about retail earnings. Walmart has doubled the performance of the Magnificent 7 over the last 12 months. Right here in this very space I suggested buying the dip when the stock sold-off on weak guidance. And Investors who did chalked up gains of about 3%.

I love the consumer, Walmart the stock and making money but not even I can get super fired up over grinding out 3% trades on the largest employer on earth that isn't the Chinese Army. The entire planet follows Walmart and Amazon. If you don't own the stocks you should. And, once you buy it's best to forget about them entirely. 

If you want to make money trading consumer stocks you need to get into the grit and draw conclusions where the rest of the world doesn't. It requires knowing not just the financials but the stories behind some of the three-legged dogs, fallen angels and more obscure companies just popping up on Wall Street radars. ...

Wall St and Retailers adjusting to a random news flow world...

Remember the beginning of January? Retailers were pre-announcing strong Holiday sales and margins. Consumer Discretionary stocks were on a heater dating all the way back to pessimism lows last August. For every Kohl's or Target falling behind there were two or three Walmart's, Costcos, Victoria's Secret or Amazons; quality names near all-time highs based on nothing but old-fashioned execution.

It all seemed so rational. So fair. "Good news is being rewarded, everyone else is Target" we thought, "Surely nothing can stop us now"

Annnnnd that was the top. At least for now. As we wage into the Meat of retail earnings season next week a theme as emerged and it's sort of thorny. Companies are reporting strong results and guiding 2025 below estimates. Generally nothing disastrous. But words like "value conscious" and "promotional" are being used. 

We could let it slide a bit when Amazon said it. Amazon has a lot of spending to do. Same for Walmart. But we're only a couple weeks into these reports and we've heard variants on Beat and Guide Lower from, off the top of my head:

• Walmart...

Home Depot is getting the headlines but there are better trades below the surface

Home Depot is who I wrote about them being last night; a great American company more or less chained at the neck to the US housing market. This morning HD shares are higher by a couple percent after the company reported positive comps for the first time in 2 years and slightly better than expected guidance. 

Listening to the call as I type. The company is taking share, where possible and continues to invest in the business. HD can make you money if you get long during periods of housing recovery but, well, we're not there yet. 

Senior Exec VP Ann-Marie Campbell and CEO Ted Decker on the HD Analyst call just now: 

• "We continue to see softer engagement in larger discretionary projects"
• "The higher interest rate environment continues to pressure larger remodeling projects"
• "Our customer is very healthy... as they stay in their houses longer they will take on larger remodeling projects as opposed to moving [but not yet]"

So, HD...

Every year I sit down with my 2 kids and put together a portfolio of Consumer Facing stocks. The picks aren't all retailers but each fits in the bucket of my expertise. They make products I can see, feel and sometimes taste. They are brands that evoke, or at least used to evoke, Feelings in domestic consumers and investors.

Most importantly, they are companies with Stocks I believe can make me, and my kids, money over the coming year. The portfolio gets adjusted periodically, opportunistically but never casually. We trade around the positions but the core is adjusted only when the stocks out-run their target, the story gets worse or we want to free up money for a better investment.

Those are the guiding principles guiding the Retail Round-Up Model Portfolio. Today and tomorrow I'm unveiling my favorite consumer longs for 2025 as it stands right now. My goal isn't to minimize risk or free-ride market trends. Your situation will vary but this is a concentrated, fairly aggressive portfolio designed for people with long time frames. The starting value was $10,000 as of 12/31/2024 with $10,000 split equally across these ten stocks. Any trades will be recorded as of the...

As of December 31, 2024