2 Stocks to Buy, 1 to Sell Because the Wealthy Rule America

As a long-term investor, I can live with near-term weakness in these two stocks, particularly with the cover of a hedge, because I'm confident in sustained upside once any dust settles. Quite the opposite holds true for a stock like Teavana(TEA) , which I would sell or not buy.

As I noted in an article for TheStreet back in May, like other core urban holdings, Tesla Motors(TSLA) and Lululemon(LULU) , Whole Foods employs a sound geographic strategy:

It's no surprise that Whole Foods locates no less than three stores from my not-all-that-affluent home in very affluent Santa Monica and a total of seven stores within five miles. Manhattan counts six stores and another under development on 57th Street. The same strategy applies in San Francisco where Whole Foods has five locations and is set to add two more. If you survey Tesla showrooms and Lululemon outlets, you'll see the same type of approach.

Teavana, meantime, focuses its stores in malls across the country.

Granted, Starbucks pervades suburban environments as well, but it keeps a massive urban presence. Teavana, given that its product is right up the urbanities' alley, particularly price-wise, should consider doing the same.

Instead, it sticks to an unimaginative, purely retail model in relatively sterile environments, while Starbucks morphs itself into something more than a retail coffeehouse. It has begun experimenting with beer and wine sales, it continues to expand its food offerings and, if it extends its new tea bar concept, it could further crush the barely-public Teavana. Maybe they'll prove me wrong, but the one thing that probably keeps Starbucks from making Teavana an offer is the latter's weak location strategy.

Since I wrote the above-cited article (May 11), TEA is off 33%, while SBUX is up 29% and WFM has added 46%. So, again, proceed with caution, but don't think for a second that stocks with an urban focus cannot continue to proceed higher.

Don't fight the trend.

The affluent will continue to line up at ever-evolving places such as Starbucks and Whole Foods, regardless of the broad economy. Starbucks and Whole Foods not only locate where the affluent live and roam, they, like TSLA and LULU, do a masterful job of identifying with their lifestyles.