Bye Bye Big Lots

I recently closed out my position in Big Lots (BIG) the U.S. based discount retailer at $33 and change. After 2 years of owning BIG, it's seems they can't find their mojo. Management issues, inventory back-ups and weak merchandising have all hurt BIG. I've decided to move on and continue to build cash, hoping for a summer swoon to add to other more favourable positions that I currently own. I was able to exit with a razor thin profit. That's our kind of mistake - when an idea doesn't work-out we want our money back. I don't like losing money. Retail is a tough business, when you're competing against the Costco's, Walmart's and Amazon's of the world. Just look at this:



On another note - not related to retail.

If you didn't read my post in March on yield - click here

You may have noticed that interest rates ( not the short-term rates set by the Fed ) have been backing up ( going up - so bond prices have been going down ) over the past month and half. The U.S. 10 year bond has risen from 1.7% to 2.1%, which may not sound like much, but it's enough to make people skittish on the interest sensitive stocks like the pipelines, telco's and Reits. They have been selling off - they are STILL QUITE OVER VALUED. They are vulnerable to the downside if rates continue to go up. Here's a look at a few Canadian household names over the past few months. The sell-off in these names has already wiped out your divy for the year - caution - turbulence ahead: