I bought KSS in January on the belief that investors had overreacted to weak holiday sales figures from the retail sector, and based on Kohl’s better than feared quarterly report issued last week it appears that assumption is proving true. At the end of February we had a 3% gain in this position, about one-fourth of our way towards our target return of 11.6%.

But that’s pretty good given the pressure on the retail sector at the moment. Impending trade wars with border adjustment tariffs are weighing heavily on this group of stocks, but many of them have become oversold and should bounce strongly once the political demagoguery surrounding this issue subsides and is replaced by rational policymaking.

I believe there is a good chance that will happen before our target holding period in this position expires on May 11. By then the next set of quarterly numbers will be out, and continued strength in the economy should be reflected in a more optimistic tone in forward guidance.