Back in 2008, the world seemed to be ending. As banks failed, investors fled to liquidate holdings, unemployment surged, and aggregate demand tanked, there was one sector that many expected to benefit from the seeming financial apocalypse: low-end retailers. While Wal-Mart (WMT) and Costco (COST) were potential beneficiaries, the very low end was expected to do the best: Family Dollar (FDO), Dollar Tree (DTR), and Dollar General (DG).

Over five years later, that bet would have paid off handsomely.

Family Dollar

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DLTR was the best bet, but an equal allocation to all three would have yielded a CAGR of 23.2% over the last five and a half years, while the S&P 500 returned only 14.6% over the same time period. That is an impressive alpha, and it required really no fancy analysis to achieve.

Of course, buying and holding these stocks is only part of the story; an investor would need an exit point and a target, and for some that target was hit in 2014. With economic tailwinds, steady growth, and hints that the minimum wage might be rising federally after already rising locally in many parts of the country, the growth prospects of these companies might appear limited from a macro perspective. Thus 2014 was a time for rebalancing.

It’s no surprise that activist investors would choose now to focus on this sector, which has experienced rapid growth and increasingly divergent trends. Dollar Tree has outpaced its competitors throughout 2013, offering an opportunity for DG and FDO to unite and grow stronger through synergies that would allow them to topple DLTR and reverse its market share growth. Carl Icahn suggested that FDO do exactly that, and it didn’t take long before DG and FDO announced that the former would buy the latter, causing FDO stock to jump as the others held steady.

Now some investors might be rethinking the dollar store play on macro events, so we might see this sector become less interesting and less important to many investors’ portfolio in the coming years. It might also be a time to rebalance and weight more heavily for or against DLTR, now that the competitive landscape has changed.

In any case, the long term buy-and-hold investor who had a simple macro thesis and stayed true to it for several years has made a very healthy and sustained profit, while the more short-term investors saw limited entry points and even more limited opportunities to bet one store against another. This simple case study is a significant lesson for all traders: your portfolio doesn’t have to be complicated or fancy, but your thesis has to be sound and you need to stick to your plan for your portfolio to pay off.