Retail Stocks: Don't Be Excited Over Them Yet

Retailers holding up despite a poor December showing. Don't get too excited; this was one of the most shorted groups on the street.

But aside from a short squeeze rally, what would it take to get investors back in a real way? Besides signs that we are not going into a deep recession, the most important factor for retail stock investors is limiting store growth.

Bears have complained for years that there are too many stores being built, and too many restaurants being built despite the fact that casual dining (ex-McDonalds ) is in a slowdown.

There are signs this is happneing now. check out reports that big retailers are shelving plans to add stores in Chicago.

Cowen today estimated that 20,000 independent restaurants could go under this year, which would blunt some of the downturn for the publicly traded restaurants that survive.

Questions? Comments?