Don't let Black Friday put you into the red!

Please resist the urge for that extra bit of 'retail therapy'.

Sad woman in a trolley symbolising falling share price.

Image source: Getty Images

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Another week full of news and views…

Don't let Black Friday push you into the red

Well, it's a month today until Christmas (sorry!).

And today's also 'Black Friday' – a 'sales event' we've inherited from the Yanks that our retailers will happily use to get us to buy stuff.

It's followed by Cyber Monday in a few days' time. And ditto.

Now, I own some retail shares. So, you know, if you're going to spend anyway…

I'm kidding. I actually don't want you to spend. At least, not unless you were going to buy the thing anyway.

By all means, get something on special today that you were going to buy on Tuesday. Or save a few bob on the kids' Christmas presents by buying them early.

But please resist the urge for that extra bit of 'retail therapy'.

No, I'm not (just) trying to be a killjoy.

First, the RBA couldn't be clearer – if we keep spending, they'll keep jacking up rates.

Second, most of the dopamine-hit consumption is going to be on stuff you'll throw out soon enough anyway.

But third, and most importantly, did you know that $200 feel-good purchase you make today could instead be $2,800 in 30 years time, if it was compounded at 9%, roughly in line with historical sharemarket returns?

You didn't? Well now you do. And if you earn 9% on that $2,800, that's $250 you could spend every single year thereafter!

Seriously. Stop spending. You don't need the stuff, and 'future you' will thank you.

Bank CEOs' full-court press

Tell you what, that bankers lobby seems to pack a punch, huh? Labor and the Greens had agreed on legislation that would make bank bosses personally liable – with a $1.1 million fine to boot – for their transgressions while in charge.

But at the last minute, the government pulled the bill, apparently after massive pressure from the Fat Cats Union.

Now, I'm not anti-business. Or anti-bank. I'm not even anti-bank-bosses.

But given how systemically important these companies are, and how frequently they've been cited in the media and in a little thing called a Royal Commission… don't you reckon they could use a little help focussing on some of the deficiencies in their operations?

And be held accountable for their failures, just as they get multi-million dollar bonuses for their successes?

I do. I reckon you do, too. I hope this isn't more evidence of our politicians ducking the hard issues.

Will Apple take a bite out of Manchester United?

There have been some (unsourced, as far as I can tell) reports that Apple might be interested in buying English soccer team Manchester United, which its owners have put up for sale.

Will it?

I mean, stranger things have happened, but I don't think it's likely.

Sports rights? Sure. Entertainment platforms? Yep.

But a single team in a multi-team league?

Again, it's possible.

But I would suggest Apple will have jumped the shark if they were to do a deal.

Sports teams are – with a very few exceptions – terrible investments. They're expensive trophy assets for billionaires, mostly.

They are usually not very profitable, the fans are brutal and they're essentially run under the rules of their sporting organisations (remember when some teams tried to create a breakaway league? That ended badly, and they're still in the same leagues with the same rules.)

Stranger things could happen than Apple buying Man U. But not much stranger.

We'll see.

(And having written this, Murphy's Law may well be brought into force. Apple shareholders might own a soccer team by this time next week!).

Don't write off online retail

There have been plenty of stories recently about the 'return to bricks and mortar'. To which, one might ask, 'why was anything else expected'?

The idea of the 'new normal' is seductive, as a story, but the thing about new normals is that they rarely actually happen. Oh, sometimes, of course. Change happens, and will continue to.

But those big 'this time it's different' things? It usually isn't.

The 'old normal' reasserts itself (Remember the 'inflation is dead' new normal? Yep…)

We were always going to go back to the shops, just as we were always going to go back to the office.

Sort of.

See, when a tide has gone all the way out – when all but essential workers were shopping and working from home – what else was going to happen, except that the tide was going to start heading in again?

But that's only part of the story.

"Tide goes back in again" isn't a revelation.

Nor is "people go back to the shops".

But just as the tide won't stay in, I don't think the question of 'clicks versus bricks' has been settled.

Just recently, we've seen businesses as diverse as JB Hi-Fi Limited (ASX: JBH), Myer Holdings Ltd (ASX: MYR) and Premier Investments Limited (ASX: PMV) record huge growth in their online sales, even as, yes, people go back to the shops.

And, though I'm loath to bring up something as politically charged as climate change, it's a good analogy.

Yes, on a daily, weekly or monthly (and certainly, seasonally) basis, temperatures go up and down. But, overall, they continue to rise.

And I think that's true of eCommerce, too. COVID is weather, but the trend, overall, is climate.               

Online retail will continue to grow. And grow.

Don't get caught mistaking short-term cyclicality for longer term structural change.

Quick takes

Overblown: Other than the 'return to the shops' narrative I mentioned above, the other thing I'm seeing and hearing a lot is people trying to pick stocks for the 'x' environment. Higher inflation. Higher rates. Recession. All reasonable questions, but I have two criticisms. First, we just don't know exactly what's going to happen. How high? Will there be a recession? For how long? Etc etc. But second, a lot of those assumptions are already baked into share prices. That is, the market is probably making the same assumptions you are, so there's no advantage to be had in answering the same questions in the same way! You should be looking for areas the market is getting wrong, not ways to come up with the same conclusions.

Underappreciated: Small wins. This is a theme I'll return to, periodically, but remember that the world gets slightly better every day. Usually in imperceptible increments that go unreported. If you're only looking at the bad news headlines you'll miss it. The best bit? The small improvements tend to be permanent, but the bad news tends to be temporary. Not always, and it's not guaranteed, but don't forget that things tend to keep getting better.

Fascinating: This also isn't new, but it's remarkable how quickly sentiment turns on the share market. From 'we'll all doomed' to 'the best month for the Dow in history' and now to six-month highs for the ASX. And it can turn just as quickly. I hope it reminds you that trying to 'time the market' is as silly as it sounds!

Where I've been looking: This isn't supposed to be an ad, but my team at Motley Fool Share Advisor and I have been reviewing our scorecard, with some upgrades (and some downgrades, in all probability) to come in the next week or so. There are some great quality businesses that the market is offering us on the cheap, and you don't always have to go for 'novelty'. The lesson? Read on…

Quote: "The best stock to buy may be the one you already own." – Peter Lynch

Fool on!

Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple, JB Hi-Fi Limited, and Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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