Stay Away From Consumer Stocks

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

The carnage in consumer companies continues. And Coach is the latest victim. The company missed revenue expectations as growth in North America slowed. Coach isn’t the only company to report a slowdown. We heard something similar from McDonald’s about the American consumer and Starbucks warned about a weak outlook going forward. We’ve also heard about the troubles facing the European consumer from apparel companies Nike and Deckers Outdoor. Every company just mentioned is a great brand with a strong franchise. But David and John don’t think that now is the time to buy them. With all of the warnings about the global consumer, investors may want to wait for better prices in the future.

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David Meier has no positions in the stocks mentioned above. John Reeves has no positions in the stocks mentioned above. The Motley Fool owns shares of McDonald's and Starbucks. Motley Fool newsletter services recommend Coach, McDonald's, Nike, and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 01, 2012, at 2:27 PM, JohnCLeven wrote:

    Buy when there's blood in the streets!

  • Report this Comment On August 01, 2012, at 4:16 PM, back2back51 wrote:

    I know you guys are individuals, but do you ever talk and compare notes?

    Less than two hours before this was posted, Andrew Marder of The Fool was saying SBUX was a company to look at investing in!

    Who are you trying to fool?

  • Report this Comment On August 01, 2012, at 10:19 PM, TMFBane wrote:

    Yes, we talk all the time, but we have our own opinions. We feel very strongly about that in fact.

    So Andrew is in favor of SBUX, and Michael Lewis is more bearish (not the rich and famous Michael Lewis -- our Michael Lewis). By considering both arguments, we all get smarter. For the record, David and I are huge Starbucks fans, and are taking a close look at the company right now.

  • Report this Comment On August 02, 2012, at 2:16 AM, jackc37 wrote:

    You guys are like the analysts who downgrade a company after the bad news comes out.

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