SAKS STOCK SUCKS

I am not a stock expert by any means, but I've been teaching myself how to look at balance sheets. Nothing really drives it home for you like looking at a company's balance sheet. All of these places - Saks, Neiman Marcus, Macy's, J. Crew, etc. all count their inventory as assets. Their inventory ballooned this quarter (not to mention previous quarters). The fact that they count their inventory as assets inflates their balance sheet to their favor, when in reality if they ever liquidated their inventory they would get only a fraction of how much they paid for it in the first place. I was considering buying some retail stocks since Saks and Macy's are such retail mainstays. However, we all thought Lehman Bros and Bear Stearns were too elite and rooted to fail and look what happened.

I've read some interesting articles about discount retail websites and how they are here to stay. Some examples are hautelook and gilt. I've registered for hautelook but have yet to really check it out. I went by a J. Crew last night to get a gift for a friend and picked up a catalog on my way out. I bought a $68 wool and cashmere scarf for $10 as they are having a 50% off winter final sale. I noticed that in the catalog they emphasize how cheap the prices are. They never used to do that before. I wonder how their "collection" pieces will do in the next few months.