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Catchphrases like the "Death of Retail!" or the "Retail Apocalypse!" have been flying all over the media for around a decade now. Whales like Amazon.com Inc. (NYSE: AMZN) and Walmart Inc. (NYSE: WMT) have been crushing the competition since way, way before the coronavirus upended life and commerce around the world.
Just take a look at this exchange-traded fund. I've been talking about it in my Markets Live stream because it's returned almost 5% this year. I'm talking about the ProShares Decline of the Retail Store ETF. And get this: It's trading under the ticker EMTY.
The name and ticker say it all, but still... Ouch. Someone on Wall Street has an edgy sense of humor...
In 2019, more than 9,300 store closings were announced, and the COVID-19 pandemic promises to eclipse that grim record. I'm reading now that Cushman & Wakefield estimate a whopping 12,000 big chain stores could fold in 2020.
Look - it would be unfair to lay all of this at the feet of Amazon and Walmart; for retailers, business conditions can be fluid at the best of times, and the COVID-19 pandemic has been absolutely brutal for most of the consumer spending-driven U.S. economy.
So the big players have clearly cemented their positions. But here's the thing: They're not the only game in town. Nor is all retail dead - not by a longshot.
It's just that, to use an "SAT word," retail has almost completely bifurcated; there are now two separate retail sectors emerging.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.