The surest sign that you should be thinking "buy" is when you see plenty of groupthink from the suit-and-tie crowd, especially when it's telling you to avoid a sector at all costs. That's been the case for the past few weeks with retail stocks.
First came midsummer sales warnings from Wal-Mart
Bill Mann, whose rants are always worth reading, talked about these excuses while perusing the results at Dress Barn
As a result, many retail stocks were unfairly pounded. When the talking heads start talking about the tide, it can lower all the boats. And that's when Foolish investors will see opportunity.
How's that? Just look for the real performers: American Eagle Outfitters
Abercrombie and Fitch
In the end, just remember that it doesn't matter if "retail" is rebounding. Find the individual retailers that are moving the goods in any climate, or whose stock has been savaged by short-term setbacks. And be glad the market is crazy, because without that schizophrenia, there would never be any stocks on sale.
For related Foolishness:
- Sector, schmector. Is it time to buy tech?
- What are they warehousing at Costco?
- Check out three chic stocks.