What Barron's Is Missing: There's No Such Thing as an "Amazon-Proof" Retailer

Keith Fitz-Gerald

Our team meets weekly to discuss the merits of various investment recommendations as well as the Unstoppable Trends we're following, but things got a little testier than normal when it came to Amazon and the "retail ice age" it's causing.

Barron's doesn't seem to think it's a big deal and even went so far as to declare that grocery stores and big-box home improvement stores are immune to Amazon's charge in last weekend's edition.

I wanted to bang my head on the desk!

There is no such thing as an "Amazon-Proof" retailer and any investor who makes the mistake of thinking there is may as well take his or her money to Vegas where at least they'll have fun losing it.

Here's how to make sure that'll never be you.

Mainstream Press or Mainstream Mess?

Barron's, one of the most widely respected financial publications in circulation – and one I love to read because it's so good – has offered not one, but two "head-to-wall-banging" statements about Amazon in recent weeks.

I don't know if it's a fear of change or just a human inability to understand it, but I cannot stress enough how poorly thought out some of the arguments are. Nor can I ignore the amount of money such failed logic will cost any investor who fails to understand the real impact Amazon has on our world.

First, Barron's argued that Amazon faces steep challenges in its emerging grocery business as it introduces new technologies to expedite deliveries and reduce the amount of time that customers need to be in a store actually buying products.

Barron's contention is that Americans like to go to – and spend time in – the grocery store. According to survey data, they state that fast checkout times just don't matter to consumers.

Bang! – that was the sound of my forehead as it hit my desk.

Then, just a few pages later, the newspaper wrote that home improvement retailers like The Home Depot Inc. (NYSE: HD) and Lowe's Companies Inc. (NYSE: LOW) have "virtually Amazon-proof" business models.

Bang! – my forehead hitting my desktop yet again.

The idea that a retail business model is immune to Amazon's charge is naïve at best and exceptionally shortsighted at worst. Either way, it's a costly notion.

The situation reminds me of Thomas Watson in 1943 when he said that he thought there was "a world market for maybe five computers." Or Spencer Silver, the chemist who said that "the literature was full of examples that said you can't do this" right before he invented the adhesive that made 3M Co.'s (NYSE: MMM) Post-it notes possible.

To be fair, I don't want to call out the writers at Barron's. Most of the arguments they advanced actually originated with Wall Street analysts who "cover" grocery store stocks and big-box retailers in a way that would make politicians green with envy.

Once again, Wall Street and the financial press are ignoring h…

Join the conversation. Click here to jump to comments…

Keith Fitz-Gerald

About the Author

Browse Keith's articles | View Keith's research services

Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean, and he's also the founding editor of Straight Line Profits, a service devoted to revealing the "dark side" of Wall Street... In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.

… Read full bio