Weekly TikTok Haul Analysis: 11/10/2025

Over the past few weeks, an interesting dichotomy has emerged.  SaaS and tech companies alike have broadly seen improvements in margins and net income, while retailers and other consumer discretionary companies have largely met or exceeded top-line expectations but are warning of a potentially gloomy future.  What am I doing in response to this, personally?  Shorting XRT.  Below, I’ll outline my reasoning behind this move.

According to the Congressional Budget Office, the United States federal government employs roughly 1.25 million active duty military personnel, 1 million military reservists, and 2.25 million civilian personnel - many of whom have not received a paycheck in quite some time.  Additionally, 40+ million people who receive SNAP benefits are facing financial insecurity, as the fate of their benefits sits in limbo.  

Although government shutdowns don’t typically affect publicly traded companies, there is currently a substantial cohort of people who haven’t had access to their entire income, or a significant portion of it, for more than a month at this point in time, representing more than one-third of Q4.  Given the fact that most Americans live paycheck to paycheck, no money coming in means little to no money going out.  

While it’s uncertain the degree to which tariffs have affected the overall price of goods, the market certainly believes that tariffs are a huge headwind for any company selling physical goods.  This is demonstrated by the fact that nearly all retailers have underperformed the broader market YTD.  

Retailers and restaurants alike are seeing rough waters ahead, and their share prices have certainly reflected this.  Stocks like Chipotle (Ticker: CMG), Garmin (Ticker: GRMN), Elf Cosmetics (Ticker: ELF), Etsy (Ticker: ETSY), Brinker International (Ticker: EAT), and more are down considerably post earnings, demonstrating a trend that will likely continue as we make our way through the back half of Q3 earnings season and some of the smaller retailers report their earnings.  

XRT is largely composed of retail plays that are generally perceived as lower quality.  Some of the holdings include: The RealReal (Ticker: REAL), Macy’s (Ticker: M), Ross Stores (Ticker: ROST), Dollar Tree (Ticker: DLTR), Dillards (Ticker: DDS), Kohls (Ticker: KSS), Five Below (Ticker: FIVE), Burlington Stores (Ticker: BURL), Sally Beauty Holdings (Ticker: SBH), Ebay (Ticker: EBAY), and so on (excel spreadsheet of holdings available here).  Generally speaking, many of the brands in the ETF have very little moat, and are older, “stuffier” retailers that are clinging on by a thread.  

While there certainly are some high-quality names, like Amazon.com (AMZN), Walmart (WMT), Costco (COST), and TJX Companies (TJX), these holdings are fewer and farther between - many of the higher-quality holdings are also trading at or near all-time highs, too.  Given the market conditions we’re seeing now, an imperfect earnings report from a company trading near an ATH can very easily send the share price spiralling.  

Lastly, out of the 77 holdings in the ETF at the time this article is being written, 44 of the holdings have not yet released their earnings reports.  Many of the 33 companies that have reported earnings operate in the automotive sector (which also hasn’t been performing great lately), meaning XRT can provide some great exposure to general retailer stocks at this point in time.  

The risks here are fairly obvious and broad, which is why this is a small position for me.  The largest risk is a bounce back in the retail sector that can be fueled by any number of things.  The two most significant risks for a retail bounce back are: 

At this point in time, I think that shorting XRT can provide some great protection from general market moves, and potential poor earnings reports in the near future.  Full disclosure:  I have a small short position on XRT at the time this is being written.  

I generally don’t like shorting a broad portion of the market, so I am treating this position as a small amount of portfolio insurance that can be drawn upon if we see a downturn in the market.  This isn’t a Big Short-style bet against the market for me.  Instead, it’s a vehicle for raising some capital to buy great names if the market goes down, and an insignificant loss if the market continues the tremendous bull run we’ve seen.

Disclaimers: I’m not a financial advisor (so this is not financial advice); I’m just your average, everyday retail investor.  I am biased, as I currently have a short position on XRT.