My "True Religion" is Capitalism

Ya, that's right. It is not Judaism, Hinduism, or anything more exotic. It is old-fashioned, conservative, "true religion" i.e. "Capitalism" .

When my "true religion" does not live up to its expectations, I have no choice but to renounce and convert to agnosticism and not some other form of "Opium for the masses!".

Today "True Religion" the ecstasy (E) of the town, gave back $4.2 in after-hours (approximately 22% down). When the street expects 44 cents per share and the company can only muster an ice-cold, thawing 35 cents a share, you are not going to get converts, but a bunch of agnostics.

Stocks such as True Religion (TRLG) thrive on growth, their current price is a mere reflection of discounted future cash-flows. When such growth expectations fall short by a wide margin, nasty holes in the denim are the only things that remain in vogue. My friend, that in a nutshell is Wall Street.

True Religion a Los Angeles based company, founded by the husband and wife pair of Jeffrey and Ken Lubell was based on their love for music (rock, hip-hop & R&B) that translated to denim apparel; They pay attention to fashion-forward consumers and deliver innovative , hand-sanded washes, and trendsetting lines. I personally think their Jeans are amazing! However, some friends of mine say "So what, it's just a denim!" I say, your choice of denim can be a rubberstamp for life! I am exaggerating! However, I think, I make my point with some!

Not just investors, Heidi Klum, Usher, and the cast of the Desperate Housewives subscribe to that thought process. In addition to celebrities, some of the world's well known retailers such as Barney's of NY, Harrod's of UK, L'eclaireur of France, and B'2ND of Japan, etc. have decided to extend shelf space.

Although, I like their Jeans, cerebral me says that it is really hard for companies to sustain fashion statements over extended periods of time. The problem is that fashions blow hot and blow cold, and for companies to keep pace with the vagaries of a consumer is very difficult. As they say "One Robin doesn't make a spring".

I think True Religion shares have gotten somewhat ahead of the business and the street is starting to sober up. In my opinion this will be a repeat story with many of the specialty retailers in the New Year. As the US consumer comes to grip with more mundane issues such as monthly mortgage payments, credit card bills, and shopping at Costco, the importance of making a fashion statement with True Religion will become somewhat less significant.

It is high time that prudent investors start taking taking some money off the red-hot specialty retail sector table.