Inside The Consumer Mind w/ Jeff Macke


More than half of us believe we’re heading for another Great Depression, according to a recent Rasmussen poll.

And who can blame us for feeling that way. With home prices plunging and lay-offs constantly on the front pages, it feels like a short step from the headlines – to the breadlines.

But that’s probably not the case.

Oh, there’s no denying these are hard times, but they don’t compare to the Great Depression where up to 1 out of every 4 Americans were out of work. (Currently unemployment is around 8%.)

Still, it’s all about perception and the perception is that times are hard.

In fact, a report from retail consultancy Retail Forward and PricewaterhouseCoopers suggests that belief will cause shoppers to become "entrenched" or cut back on purchases and do with less.

In other words consumers are cocooning – staying home and waiting for the hard times to pass.

So what's the trade?

Resident retail trader Jeff Macke is well aware of the trend. “People are scared in this economy and they tend not to leave the house as much. So when they spend money, they spend it on things they use at home.”

And that benefits a handful of retailers. They follow:

Macke’s Retail Pix

Home Depot

“You’ve got to love these stocks on any kind of pullback,” says Macke.

And don’t be fooled into stocks that seem similar. “The phenomenon is one of discounting and nesting,” he explains.

For example Macke doesn’t like Williams-Sonoma. If you can buy what a retailer sells cheaper at Wal-Mart, Macke says stay away.

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Trader disclosure: On Mar. 25th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Macke Owns (AAPL), (POT), (WMT), (MOS), (GE), (SDS); Macke Is Short (BRK.b); Seymour Owns (AAPL), (BAC), (FXI), (TTM), (AUO), (WBD); Najarian Owns (C) Call Spread;Najarian Owns (AGN) Call Spread; Najarian Owns (AAPL) Call Spread: Najarian Owns (BX) Call Spread: Najarian Owns (GD) Call Spread: Najarian Owns (MS) Call Spread: Najarian Owns (PALM) Calls; Najarian Owns (RHT) Calls; Najarian Owns (XHB) Call Spread; Najarian Owns (SWY) Calls; Najarian Owns (XLI); Najarian Owns (STX) Calls; Najarian Owns (WDC) Call Spread with wires