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Every Recession Has a Silver Lining

By Rick Munarriz - Updated Apr 5, 2017 at 8:02PM

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The sky is falling, so catch it in a cup.

The optimists are coming out of the woodwork. Whether it's the market's resiliency in recent days or just the cathartic nature of a group hug, the media is beginning to wax positively on the world's dour economic state.

AOL is hopping on the bandwagon, initiating a poll over the weekend to gauge what consumers feel is the biggest benefit of this painful recession.

The initial results may surprise you. At the very least, they surprised me.

Falling Gas Prices

61%

Bigger Sales

15%

Lower Interest Rates

14%

Cheaper Homes

10%

Source: AOL (based on a current total of 104,819 votes so far).

These are the only four choices in the poll, so as investors we shouldn't bellyache about "ridiculously low stock valuations" not making the cut. However, even for a consumer-facing poll, one would think that the insane discounting taking place at retailers this holiday season would be more of a pocketbook godsend than spending a few coins less to get to the mall.

In fact, given that so many Americans are swamped in debt, one would think that lower interest rates would be a bigger trigger for excitement. You have to be a real heavy-duty commuter for your fuel costs to lap your car payments, auto insurance tab, and maintenance bills.

At least the AOL voters got it right in placing cheaper homes at the bottom of the priority list. Prices will likely have to head even lower before consumers start buying houses again as long as we have a glut of unsold homes on the market. I guess Wall Street doesn't see it that way, as shares of homebuilders like Lennar (NYSE:LEN) and D.R. Horton (NYSE:DHI) have more than doubled since bottoming out two weeks ago. I wouldn't even go there with other people's money.

Getting back to my shock at "bigger sales" being such a poor poll candidate, have you seen the deals out there? When even upscale jeweler Blue Nile (NASDAQ:NILE) is offering daily gem discounts, you have to look hard to find a retailer that isn't marking down merchandise.

Discounting is usually a death sentence to retailers, especially high-end chains, but maybe it's different this time. Williams-Sonoma (NYSE:WSM) actually raised its guidance last week. Comps at Saks (NYSE:SKS) fell by 5.2% last month, but that came after a 25.7% surge in November of 2007.

So maybe this won't be a brutal holiday season for retailers after all. With crude oil prices down to less than a third of their all-time highs, maybe retailers are benefitting from cheaper transportation costs and the added incentive of cheaper gas-guzzling trips to and from the mall.

OK, pollsters. You win. The drop in gas prices is the real silver lining of the recession, but only because it provides a golden opportunity for retail.

Blue Nile is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz considers himself to be a toothpick collector at the mall food court. Yes, there is a free lunch out there. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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Stocks Mentioned

Lennar Corporation Stock Quote
Lennar Corporation
LEN
$87.20 (3.48%) $2.93
Williams-Sonoma, Inc. Stock Quote
Williams-Sonoma, Inc.
WSM
$154.05 (3.91%) $5.79
D.R. Horton, Inc. Stock Quote
D.R. Horton, Inc.
DHI
$78.40 (4.64%) $3.48
Blue Nile, Inc. Stock Quote
Blue Nile, Inc.
NILE

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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