All stocks are not the same: plenty of winners and losers.
I was discussing how quick investors were to pull the trigger and get out of stocks with Brian Sullivan at 2pm ET. It's true; when you have volatility we have had this year, when the Dow can move 300 points in a day and no one even blinks, you will have investors shoot first and ask questions later, as we have seen with Sears today.
But don't think that everything is the same, that stocks only move in tandem up or down. True, correlations are unusually high, but even in a space like retail there are plenty of winners and losers.
In retail, for example, there are a large number of stocks that are dominant in their space that remain favorites of investors: Apple , Bed Bath and Beyond , PetSmart , Advance Auto Parts .
The other side of the coin is what I call "slow train wrecks." One example: office suppliers. Look at Office Depot and Office Max , both down over 60 percent this year. Staples not much better, down nearly 40 percent. They're down because there's too many of these stores and there's been very little consolidation.
Consumer electronic stores have had have had a miserable year as well...Best Buy is down over 30 percent and near a three-year low. Topline was not horrible for the most recent quarter, but lower gross margins have been a killer: they simply cannot compete effectively against online retailers with the additional expenses entailed in big-box retailing.
Much of the margin pressures are due to the simple fact that "software is eating the world," as Marc Andreessen, founder of Netscape, put it. The internet share of retail sales has been increasing each year.
At least Best Buy had modest topline growth — when you are Sears, forget about it. Sears had had declining topline, on top of margin pressure, and haven't been able to lower costs.
Then there's a group in the middle — investors can't quite decide if they're long-term winners or losers. Good example: Barnes and Noble , which has been choppy this year largely because it's still not clear if the Nook e-reader is a winner or loser.
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