Oversold stocks we are buying now

**Dave** (0:03)
Happy Friday, it is the end of the week, end of the month. I personally couldn't be any happier to say goodbye to February. It's been a rough one for some of our favorite stocks. The S&P was actually only down about 3% in February, but stocks that we like to talk about, we're not so lucky. Tesla down nearly 30%, Bitcoin 20%, Robinhood 20% in just the last two weeks, Palantir 30% from its high, and of course, NVIDIA down 13% in the past week. So today, we're here to ruin another stock or maybe an entire sector just by talking about it. Brace yourself, retail stocks. No, not really. We do have some stock pricks for companies that have already been hit. These are companies with hot trending products that have been oversold from both recession and tariff concerns, but whose sales should still be strong and now could be the opportunity to pick them up for cheap. Today on Dumb Money, we are going shopping for retail stocks. This is Dumb Money Live.
Hey there, Dave here, along with Chris and Jordan. We are Dumb Money. Welcome to Dumb Money Live. My job is to remind you to smash the like button for the almighty algorithm. While you're at it, why not post a review for us on your favorite platform? If you're listening on Apple podcast right now, we don't have enough reviews. I feel like that would really help out the channel if you would just post a review for us. Anyway, Chris, Jordan, I'm not sure I have any free cash at the moment, but let's talk what caught your eye in retail stocks.

**Chris** (1:36)
No cash, Dave. What?

**Jordan** (1:39)
You got credit. Don't you have a little space on your line?

**Dave** (1:44)
I still have margin available.
Yes. I'm not fully leveraged. And I think that Chris, you're deleveraged a little bit too right now, right?

**Chris** (1:56)
I am delevered. I am delevered. So as you guys know, I've had this fluctuating, mainly Tesla position since the election, and I've mostly timed it right, but there have been moments where that have been really painful. And last week was one of those moments, right? So, let's just say, last week was a seven-figure week for Tesla, and not in the right direction for me.

**Dave** (2:26)
So I'm in the same boat. I have this stupid email that comes to me showing my net worth every day, like gain and loss in my net worth. I try not to look at individual stocks, but there were a couple of emails where I was just like, oh, I can't do this anymore. I'm done.

**Chris** (2:44)
You know better than that. You're not supposed to look at your account on down days. That's our whole strategy. Just don't open up your account on down days.

**Dave** (2:53)
Yeah. No, I'm fine now.

**Chris** (2:55)
So no, I'm fairly light in Tesla right now, by the way. I have a position. I feel like at this point moving forward, I can't not have a position in Tesla, so I have to protect myself on the long side. But the big issue with Tesla for me has been the reorientation back towards their automotive division, right? So it became clear to me that the market is emphasizing whatever's happening in auto for Tesla, whether it's in China or Europe or here in the US. And it appears to be that over the course of the next few weeks to couple months, that will likely to continue to be the storyline.
Not Optimus. And you guys know, that's the only thing I care about.

**Dave** (3:44)
Optimus is the only play right now, and everybody's talking about automotive sales and declining Europe sales and things that are not really our reason to be as aggressive in Tesla.

**Chris** (3:57)
Yeah, but it's annoying, Dave, because if something happens on the automotive front that does turn positive, it will also impact Tesla in a positive way, right? So I still have to have upside insurance, just in case.

**Dave** (4:09)
You have upside insurance, you don't have any downside insurance, that your only downside insurance is the fact that it's mainly options that will expire worthless, and you know that that's your insurance premium.

**Chris** (4:21)
Correct. So I've been doing a tremendous amount of work on retail stocks since November, as I always do this season, because retail stocks either make it or break it holiday season. And most of those trades have gone really well. The one that didn't go as well as I anticipated it to go was a long trade on Birkenstock. Birkenstock came out with earnings. Earnings were great, but they made a comment about tariffs. And just that comment alone kind of took over investor sentiment, the concern over tariffs. So, and I think maybe that that has more impact, maybe in some ways on Birkenstock, because Birkenstock kind of controls the amount of inventory if they put out there. So, they don't have the ability to really ramp up inventory at times when demand is increased, because they just keep such a tight control over their inventory. So, something like tariffs can really cut into their margins at a company like Birkenstock. That said, I think we have to know that going forward on every retail stock, they might kill earnings, but one comment about what might or might not happen over the course of the next few quarters, if tariffs come into play, could meaningfully impact a price action on a stock regardless of whether or not the company crushes earnings.