Retail’s Revival

Featuring David Trainer

David Trainer, founder of New Constructs, likes purchasing shares of Best Buy. He discusses his trade idea in this interview with Alyona Minkovski. Filmed on April 30.

Published on
4 May, 2018
Topic
Trading, US Dollar, Technology
Duration
13 minutes
Rating
25

Comments

  • BP

    Besar P.

    12 5 2018 04:50

    0       0

    Current financials look good for now; but that is already reflected in the stock price.

  • Jc

    Justin c.

    7 5 2018 16:51

    0       0

    Good piece. Can we have a trade idea be a long-term investment? How about a year? I would certainly think so if it is communicated properly. I really wonder what percentage of the audience is putting super tight stops on their trades? Most aren't buying a story like this and jumping off the train right away. I value the complete variation in the trade ideas that i have seen so far. I think he makes some good points which is where the value is as opposed to the consensus narrative.

  • AC

    Andrew C.

    7 5 2018 08:26

    0       0

    I do love what RealVision is doing, and can live with the huge variations in PERCEIVED quality that others are complaining about (For example, didn’t "World on the Brink” create some debate?). Trade ideas are just that, ideas that we can take further if we do desire...

    But, I am still dumbfounded by the guys trying to convince us to buy a stock they don't have an actual position in. Danielle Shay’s trade on Adobe was not something I would be interested in - wherein others complained forcefully in the comments- , but I loved to see her process and her putting her skin into the game.

    With these other guys "trade ideas", RealVision threatens to turn themselves into another channel on the fraudulent financial media channels, those media the RVTV creators originally wanted to disenfranchise

    • DT

      David T.

      9 5 2018 15:20

      0       0

      It's funny - when we say we have a position, then commenters rail us for "talking out book". When we do not have a position, we get comments like yours. How about simply judging the idea/pitch based on its merit?

      I've not taken any individual stock positions since we closed our hedge fund (Novo Fund, LP) and our reduced our compliance department. Candidly, the only position I have is in my company, New Constructs. I do no trading since we closed the fun b/c it's easier not to have to deal with or work around any potential conflicts. A big part of running an independent research firm is being un-conflicted, unlike my sell side competitors.

  • TN

    Thomas N.

    7 5 2018 02:52

    2       0

    A lot of the negative responses in the comments here...I have to recall the reason that RV has 'Trade Ideas'. It's more to provide viewers with examples of how trade ideas come to be, from experienced individuals that most subscribers would BEG to have the chance to talk to. The arguments below that are against the trade idea are much more ludicrous than the actual trade idea itself, and they don't provide a price estimate or time horizon. I think this Trade Idea is relevant and realistic.

  • ML

    Michael L.

    6 5 2018 21:55

    1       2

    One of the weakest guy on RV ever. I get the sense he's just using some mechanical numeric approach to identify ideas, then make up a story on top of it. The reasons he gave - like ecommerce needs retail/distribution presence - applies to any other retailer, so why not buy those? I'm sure there's a reason why BBY has done well competing with Amazon, but he's not articulating those - instead he's just citing numbers like ROIC, cash flows..etc which anyone can easily lookup. This is an accountant posing as an investor.

    • DT

      David T.

      9 5 2018 15:22

      1       0

      How many other retailers that were expected to go the way of peers that got crushed by AMZN (e.g. Circuit City) actually found a way to grow and be so successful that Amazon now comes to them for a partnership?

  • DC

    Darrell C.

    6 5 2018 03:31

    2       1

    I agree with Mr Trainer with the niche BB is modeling.....
    But really.. recommending the price at highs. . He should have,
    been going out on a limb, when it was in the $50’s..? Also the gamble is weak, risk a 20% down for only a 60% gain.....? Just weak...

    • JL

      Johnny L.

      6 5 2018 18:05

      0       1

      Remember Dan Dorfmann the cnbc jokster who hyped sit to naive viewers. That's what this episode reminds me of, RVT should not know have aired this.

    • DM

      Dan M.

      7 5 2018 21:17

      0       0

      Respectfully, your comments indicate that you may be a great investor, but not a trader which is what Mr. Trainer's idea is more aligned with. Some common trading strategies like to buy all time highs because there is no supply above (e.g., holders that will sell shares they previously bought at higher prices and have been praying for prices to rise to their break even after coming back from a losing position).

  • NR

    Norbert R.

    5 5 2018 14:47

    6       0

    Don't like he recommends it but has no position. I don't think trades like this should make it to circulation if they don't have skin in the game. It is like me saying buy Tesla, but I won't buy it.

    • SP

      Scott P.

      6 5 2018 13:22

      1       0

      Agreed, we at least need an explanation why he doesn't have a position.

    • CA

      Craig A.

      8 5 2018 15:48

      0       0

      Totally agree. Is this then just BS advise then? Why should I trust him?

  • JC

    John C.

    5 5 2018 11:11

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    I'm going to echo the other comments here in that this seems like an ill-timed investment, albeit one with huge upside if Amazon ever did buy BBY. Some of the smartest technical guys on the street are short this one BTW and the stock was up $1.21 this past Friday in line with the market surge but still near all-time highs. We've got all sorts of noisy data coming up, getting into Summer, markets sloppy, QT, Boomers scaling back/retiring, consumer debt very high, rates double what they were a year or so ago on the short end etc. etc.

    I'm not saying it can't go up but right now doesn't feel like the right time to buy, more likely a short.

    Also what's to prevent Amazon from just selectively setting up their own stores near Whole Foods (or in Whole Foods) or in certain well though out existing malls and other retail locations? Why pay a premium for an old-school retailer? Isn't part of the issue here that people are abandoning malls in the US generally and many, if not most, of these 'Big Box' retail locations have become sub-par at best? The Best Buy stores I have been in around the country are generally in older malls or shopping centers.....

    • DM

      Dan M.

      7 5 2018 20:58

      0       0

      Smart money not likely to stay short for long if this breaks out and holds above it's all time high. Short squeeze will add fuel to push the price higher.

  • NI

    Nate I.

    4 5 2018 23:13

    2       0

    I agree with imaginejml. The tapped-out consumer is far more worrisome than AMZN.

  • EF

    Eric F.

    4 5 2018 22:04

    6       2

    Lots of critical comments but it’s an idea - not a recommendation. Seems like a good one to me as Amazon needs showrooms and distribution / pick-up locations. I do like that Alyona asks if person has trade on, although not sure we should completely write-off idea if they don’t, as again, it’s an idea for research.

    • DM

      Dan M.

      7 5 2018 21:04

      0       0

      Kublir, please tell us all the opportunities you see for 5-10x upside with relatively small downside (by your definition) within the next 12 months.

  • KJ

    Kulbir J.

    4 5 2018 15:23

    4       0

    A 20% stop loss doesn't seem like a good risk management strategy to me.

    • GS

      George S.

      4 5 2018 16:11

      5       1

      Depends on your sizing, time horizon and upside. I keep 5% of portfolio for companies that literally have 100% downside but can (and do) go up 5-10x. That is how everyone should have thought about crypto at the beginning of last year.

    • KJ

      Kulbir J.

      5 5 2018 06:07

      1       0

      @George S. I agree with your sizing, time horizon and upside comment. But in this case, the guys target price on BBY is 60% higher than his suggested entry point, and he is not suggesting a 5-10x upside. A 20% stop loss on a 60% gain is not a good strategy.

  • BF

    Brad F.

    4 5 2018 15:16

    4       0

    Why don’t they have a position in it if the bull case is so strong? Is it a compliance issue with talking ones own book? I can’t entertain a trade idea from someone who is not prepared to back it themselves.

    • JL

      Johnny L.

      4 5 2018 15:43

      5       2

      not sure I've ever heard more hype in a name and this guy has no position. This interview does RVT a disservice. More like a CNBC clown show episode. He can always be right but I really doubt it.

  • KP

    Krishna P.

    4 5 2018 13:37

    5       1

    Haven't stepped a foot in BBY for years. Stock trading at an all time high. The economic book value is "garbage" The acquisition is the only upside. I don't see a moat.

    • TS

      Tod S.

      4 5 2018 13:41

      2       0

      AMZN bought WFM for $14B. BBY mkt. cap is currently 50% above that. Acquisition (“cherry”) is improbable in my view.

  • JL

    Johnny L.

    4 5 2018 13:28

    0       1

    Disagree with call on Best Buy and Amazon impact. Selling more at less profit (if it even happens) doesn't help that much. Maybe what BBY did tells you the trouble they are in. I was in two BBY stores in two cities on a weekday and weekend and the stores were empty, dirty, everything on sale, little sales help.
    Will know more soon enough but the hope for BBY may be hype

    • JL

      Johnny L.

      4 5 2018 13:33

      3       1

      Did not address a broken consumer with more debt than ever in a rising rate environment with lower growth projections. Too darn eager to press BBY over facts and data.

    • JL

      Johnny L.

      4 5 2018 13:36

      4       1

      Hyped the heck out of BBY and you don't even have a position on it if I heard that right....