Come Join the Gawkers

We Americans love a horse race, and what we love more than that is knowing who's "winning." Our national fixation on contests and victory manifests itself in some strange ways. During election time, for instance, we have the media habit of reporting who is "leading" in electoral races -- even though the margin of error often makes this assessment completely bogus.

During the shopping season, we have "Black Friday." And now, "Cyber Monday." It's the strange ritual of the mainstream press picking up retailing numbers and trumpeting them to the non-investing masses, people who, under other circumstances, wouldn't care at all if Wal-Mart (NYSE: WMT  ) "outsold" Target (NYSE: TGT  ) , or how many shoppers walked into Best Buy (NYSE: BBY  ) or Circuit City (NYSE: CC  ) .

This morning, the mainstream media were running conflicting stories about holiday sales: We had sales "down 0.9%," according to a story that didn't bother to explain what was being measured. We also had "good holiday sales," according to possibly meaningless reports of record numbers of shoppers online and off. And then we had scary holiday sales -- people getting into scuffles over sale items -- because, well, the anchors and the weather guy have to have some kind of canned frivolity to bat around before cutting to commercial.

It all gets me to wondering what this might mean for investors, who should care about sales figures -- and should realize that one weekend or season does not make or break a company. Does a wider audience for the horse race mean an even greater chance for that peculiar, paradoxical beast, "headline risk?" In other words, does the media slant on a store, or a holiday season, provide a catalyst for stock price movement around this time?

Or stranger still, and getting into a whole neo-Heisenbergian hypothesis, could the observation of and reporting on retail sales numbers actually sway consumer sentiment and thereby have a real impact on the sales and profitability down the road -- the stuff that does matter to us as investors?

I'm not so sure. On one hand, months worth of negative consumer sentiment -- stoked, to a great degree, by our pessimistic press -- didn't do much to slow down shoppers at some stores. Have you seen what's been happening at Abercrombie & Fitch (NYSE: ANF  ) or Chico's FAS (NYSE: CHS  ) these days? But it did send a lot of stocks into the tank, whether they deserved it or not.

Of course, one of the reasons I like investing in retailers is that soft "news" like this, along with the monthly runway show of sales figures, provides the Street ample opportunity to freak out. And when these sudden drops let you buy good companies at great prices, you can book some market-beating returns without a lot of intellectual overhead. (Why spend hours looking for the next big thing, when there's a solid old thing on sale once a month?)

So go ahead and join the gawkers. If the annual retail-in-the-spotlight season gives you a chance to pick up a good stock, it's well worth the price of admission. Those headlines might also give you a chance to introduce family members to the finer points of finance and investing. And that's a holiday gift that keeps on giving.

Related Foolishness:

• Is it really headline "risk?"
• Is Wal-Mart worth a buy? Two Fools duel.
• While you're at the mall, remember not to overestimate yourself.

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Hopelessly out-of-style Seth Jayson has made some of his best investments in retail. At the time of publication, he had no positions in any company mentioned here. View his stock holdings and Fool profile here. Fool disclosure rules are here.