(Pay) Attention Shoppers!

  • SumoMe

Everybody knows that the “big time” of year for retailing is in the months before Christmas.  Many fewer people know the fact that that is not actually correct.  At least not if you are talking about the action in retailing stock prices.

For retailing stocks – more often than not – “the time is now.”

Retailing Stocks in February and March

Figure 1 displays the growth of $1,000 invested in ticker FSRPX (Fidelity Select Retailing) ONLY during the months of February and March starting with the fund’s inception in 1986.1Figure 1 – Growth of $1,000 invested in FSRPX only during February and March every year since 1986

In sum, the February-March period (using total return data from the PEP Database compiled by Callan Associates):

*Showed a gain 29 times (90.6% of the time)

*Show a loss 3 times (9.4% of the time)

*The average gain during the 29 Up periods was +8.1%

*The average loss during the 3 Down periods was (-5.7%)

Figure 2 displays the year-by-year % gain/loss for FSRPX.

Year FSRPX Feb/Mar % +(-)
1986 16.6
1987 15.0
1988 13.0
1989 3.4
1990 12.0
1991 20.6
1992 2.7
1993 3.6
1994 1.5
1995 2.1
1996 15.3
1997 4.9
1998 16.7
1999 1.5
2000 12.4
2001 (8.5)
2002 2.3
2003 (0.1)
2004 4.4
2005 2.9
2006 4.1
2007 1.9
2008 (8.4)
2009 19.8
2010 15.9
2011 5.1
2012 13.2
2013 1.7
2014 3.4
2015 8.0
2016 5.4
2017 4.6

Figure 2 – Year-by-Year Feb/Mar % Gain/Loss for ticker FSRPX

Summary

Does anything discussed here guarantee that retail stocks are certain to rally in the months directly ahead?  Not at all.  As you can see in Figure 3, one could argue that FSRPX has recently experienced a near parabolic move since August 2017. 3Figure 3 – FSRPX Weekly chart (Courtesy AIQ TradingExpert)

For the record, true parabolic moves are invariably followed by something nasty.  So 2018 could see just another boring, standard issue Feb/Mar advance in retailing stocks.  Or we could see a decline along the likes of 2001 or 2008 in excess of -8%.

So like I said, (Pay) Attention Shoppers!

Jay Kaeppel

Disclaimer:  The data presented herein were obtained from various third-party sources.  While I believe the data to be reliable, no representation is made as to, and no responsibility, warranty or liability is accepted for the accuracy or completeness of such information.  The information, opinions and ideas expressed herein are for informational and educational purposes only and do not constitute and should not be construed as investment advice, an advertisement or offering of investment advisory services, or an offer to sell or a solicitation to buy any security.

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