THE IDES OF THEORY.

We're told to be leery of the Ides of March this time of year. But as investors what one needs to be chary of anytime of year is the Ides of Theories.

There's a lot of theory out there. Most of it as unreliable as campaign promises by presidential hopefuls. Here's one you heard a lot about since oil prices tanked. Cheaper gas prices make it cheaper to get to stores. Two words: In theory.

As a story in this week's Barron's noted: But a lot of traditional retailers have struggled to keep up with rapid changes brought on by e-commerce, and the most recent holiday season proved challenging for many apparel makers owing to the warmer weather, pressuring margins. 
Warmer weather and cheaper gas was supposed to bring out more shoppers.

Now, with spring approaching, investors are fretting about soft sales. Last month, for example, retail sales fell by 0.1% compared to January. (That includes restaurants.) And January's results were revised downward, to minus 0.4%.

The point here is many retail stocks, despite what some might have assumed, struggled of late. Of the eight tracked in the article, all members of the S&P 500, only two, Home Depot and Target, delivered positive total returns in the last 12 months, certainly a period of declining energy prices not just at the pump. A warmer winter in the clder climes should leave more dollars for shopping.

Political theory suggests a new White House occupant will make intelligent changes people want and can subsist with. Since the demolition of the American middle class in recent decades, there's more subsisting than living going on. The recent campaign that offers the choice of an avowed socialist, an established prevaricator and a stimulating but dangerous loose cannon is just one more case in point.

With a good number of the globe's central banks implementing negative interest rates to stimulate growth it becomes more suspect almost daily that these bureaucrats know what their doing is more theory than fact, more wishful thinking than reality.

Theories are rife, financial, social and political. How much attention one pays to them can damage more than just one's ego.