Dollar Stores as Hedge

[Kingran]

Dollar stores have underperformed the market is a very generous statement. It is a blood bath.

The below charts show DG, DLTR and SPY performance. Now you can clearly see post election the dollar stores have performed -10% to -12.5% relative to SPY.

1 month

3 month

1 year

A thought exercise. If Trump slaps tariff on China then overall equity market may suffer. OTOH, if the tariffs are milder than the rhetoric, which is possible, then there is some life in these dollar stocks.

Not sure how I want to structure the long dollar stocks and short SPY trade. But something I am considering.

[Carpian]

It is interesting that the Dollar stores have taken a hit post-election while much of the equity market has been soaring. I suspect whatever tariffs get applied will be structured so they favor Trump’s buddies and hurt his “enemies”. Not sure where the Dollar stores fall in that spectrum. They serve a lot of his voters.