(New York)

Retail is a hard sector to invest in right now. Generally speaking it seems better to buy into broad retailers like Walmart or Target than into clothing specialists like Gap, and discount retailers seem better than traditional, but the whole industry is a battlefield. With that in mind, here is a good stock to look at: Tanger Outlets (SKT). The REIT owns 39 discount malls across the US and has a cheap valuation that seems to have suffered simply from being in the sector. The company is not financially distressed and sports a 96% occupancy rate at its malls. It is trading at about half the valuation of some other popular REITs and sports a hefty 9%+ yield. Because it is in the outlet mall space, it faces considerably less turmoil than traditional malls.

FINSUM: You probably saw a Tanger last time you were on the interstate. The fundamentals of this stock make it look like a good investment.

(New York)

A lot of advisors have been going independent lately. Whether you are moving to start your own RIA or want to join a large independent broker-dealer network, there are a lot of intricacies involved with running your own shop. Before you even think about the logistics of moving, it is important to assess whether you have the skills to succeed. There are essentially three skills that one needs to become a successful independent advisor: operational experience, in-depth relationship management skills, and sales/business development acumen. Operationally, you will likely have a tight budget when first breaking away, so understanding the nuts and bolts of the business, like migrating client accounts, is critical. Secondly, you will need to be able to concisely define the nature and scope of your relationship with clients in order to keep them happy for the long-term. Finally, you will need to be able to convince people why they should manage your money (without the weight of a wirehouse brand behind you!).

FINSUM: As a companion to the above, Michael Kitces notes that most successful independent advisors had seven years experience before going it alone.

(New York)

If there was ever a stock market indicator that makes us worry, it is when the general public gets very bullish. Nothing seems to yell “stock market peak” like a record setting sentiment number. A new sentiment tracker from Qontigo called ROOF (risk-on/risk-off) just registered a score of 4.8, which is in the 95th percentile historically. The ROOF score hit a low on October 2nd and has been rising since then.

FINSUM: Whenever we see readings like this it just always feels as though a correction is near. The reason why is that since people’s expectations are high, they are easily let down and get fearful/redemptive.

(New York)

This time of year it would be easy for investors to start feeling rosier about retail stocks. After all, holiday sales are the best time of year for the stocks and it would be dangerously easy to think these shares might have turned the corner because of better holiday sales. However, the key to choosing these names is to understand “bifurcation”, according to Cowen research. That bifurcation is that broadline retailers like Target and Walmart are doing well, while apparel-driven retailers like Kohl’s, Gap, and Macy’s are not. For example, Target and Walmart are up 88% and 27% respectively this year while Macy’s and Gap are down 49% and 33% respectively.

FINSUM: Momentum seems like a friend in the the retail space. We expect this bifurcation to keep going, especially as consumer purse strings are likely to be tighter this holiday season.

(New York)

Goldman put out a warning on Friday and advisors should pay attention. The bank is warning of what it calls a “baby” bear market. The focus this time is not on equities but on bonds, which have mostly been very hot this year. Goldman thinks that Treasury yields are going to take a hit in 2020, falling back to around 2.25% on the ten-year. That is a pretty large move from the 1.7% level seen today. The catch on Goldman’s call is that it doesn’t really see the move beginning until the second half of 2020, so it is a bit of a delayed bet.

FINSUM: This is quite a long-term view and in Goldman’s own words is contingent upon investors thinking the Fed might hike rates. That seems a LONG way off; at least post-2020 election we would think.