Peter Lynch revisited. Remember the master? He bought stocks of companies where he and his family liked shopping at and buying the products of.
How about the opposite? Where you don’t like shopping at?
A few weeks ago, I did a comparison of Amazon versus Walmart and found Walmart’s online system was awful. I wrote to an investor friend:
If I were running Walmart, I’d write a piece of software to ensure everything I sold was $1 cheaper than Amazon and I’d do Walmart Prime — $50 a year for free shipping on everything…. Walmart wanted to charge me $18 on a $290 Netgear purchase…. With Amazon it was cheaper and the shipping was free.
You can’t compete online with a higher price on an identical product. You can with in-store, maybe. (Maybe not.)
In fact, it was this experience with Walmart that caused me to include it in my list of shorts in this blog. And now our Walmart short has paid off magnificently:
I’m holding onto my Walmart shorts. I expect them to fall even further. I watched their CEO, Doug McMillon, on CNBC yesterday. He was aggressively quizzed by Cramer, who was clearly disappointed with Walmart’s earnings report — flagging sales and poor profit. McMillon had no answers to a very disappointed Cramer (who had obviously recommended the stock at some point).
In fact — Australian expression — I would not get McMillon to organize a queue for an outhouse.
He gives the Jewish word nebische a whole new meaning.
Walmart’s miserable results says two things about the state of retailing in the U.S.:
1. America is over-retailed. Too many shops. Too many malls. Too much stuff nobody wants.
2. Walmart is a miserable place to shop that has been passed, in price, by Amazon and Target, in food by Whole Foods and a million others, and in convenience and innovation by Costco, whose stock got brought down yesterday.
Frankly, I wouldn’t touch Costco at these reduced prices. It’s way overpriced. P/E is 27.9. It’s going down.
GS is another of my recommended shorts. They missed their Wall Street expectation last night. I expect them to fall nicely too.
Barnes and Noble could be another short: Yesterday, I was looking for a couple of old books. Amazon didn’t have them (amazingly). So I tried Barnes and Noble. They had them.
When I went to check out on my grand $20 purchase, this is what I got from Barnes and Noble:
My God, if you can’t get your web site working in today’s world, you got a real problem.
Saving money by staying out.
Todd says “When in doubt, stay out.“
That’s good advice in today’s market volatility and disappointing earnings.
What determines our success is as much the companies we choose to stay away from as those we choose to be with.
This is not rocket science to an individual investor, like you and me, who’s sitting on cash.
It is news to a mutual fund, which has an imperative to hold stocks — no matter how bad many of them are, or how much many of them have fallen (thus violating our Inviolate Stop Loss Rule.)
Why the imperative?
Simple — fees.
Most mutual funds don’t get paid a management fee on cash. They get paid on what stocks they own. No matter how awful the stocks.
Saudi Arabia is not my most favorite country. First, it won’t allow in Syrian refugees. Not a single one. Second, it’s destroying Yemen, killing women and children. Third, it practices Shariah Law — “justice” as idispensed in the 7th century. This story from yesterday’s New York Times blows me away. He’s my age group. I’m 73.
Britain Urges Saudis to Free Grandfather Facing 350 Lashes
LONDON – For more than a year, an asthmatic 74-year-old grandfather and former oil executive has sat in a prison in Jidda, Saudi Arabia, accused of violating the country’s strict prohibition on alcohol after the authorities found bottles of homemade wine in his car.
The case of the former executive, Karl Andree, a Briton who has lived in Saudi Arabia for 25 years and is a cancer survivor, has now become a matter of geopolitical controversy amid an outcry over the sentence he faces: 350 lashes, a punishment that his family says could kill him.
The British government said Tuesday that it was canceling a program to train prison officers in Saudi Arabia and that Prime Minister David Cameron would make a personal appeal for clemency, as Mr. Andree’s case continued to draw attention on social media.
Karl Andree, 74, has been in a Saudi prison for over a year and faces 350 lashes because bottles of wine were found in his car.
You can read the full gruesome article here.
I pray for the day America never buys another barrel of oil from them.
Everything you wanted to know about engineering.
No plan announced, says Carson.
LAS VEGAS (The Borowitz Report)—The Democrats who participated in the first Democratic Presidential debate of the 2016 campaign garnered a scathing review from the retired neurosurgeon Ben Carson, who said that none of them offered a concrete plan to protect the Earth from an invasion of bloodthirsty alien dragons.
“A swarm of marauding dragons with the capacity to shoot flames a thousand feet or more could destroy life on this planet as we know it,” Carson told Fox News. “And yet not a single one of these Democrats has apparently given any thought to such a threat.”
While the Republican Presidential candidate acknowledged that the Democrats in Las Vegas tangled over such issues as guns, Syria, and income inequality, he said, “I did not hear the word ‘dragon’ once.”
“If I am elected President, I will gather the greatest minds in technology to design and build a dome made of dragon-proof material,” he said. “As a backup plan, in the event of a dragon attack, I would attempt to convince the dragons to attack Mars instead.”
Carson said that, of all of the men and women running for President, he was best prepared to protect the United States from dragons. “This is the problem that keeps me up at night,” he said.
Harry Newton who listened to much of Nike’s Investor Day presentations yesterday. The presentations were impressive, with Nike’s growth trajectory well laid out. I’m a happy investor in the company, though their P/E is high. I’m also a happy owner of ten pairs of Nike Flyknit Lunar 2 ultra-comfortable sneakers. I have them in every color under the rainbow, some more grotesque than others. Susan doesn’t like me wearing them to the theater. I get a lot of comments on this pair:
I haven’t watched Cramer in years and I happened to catch that interview with Walmart CEO. Very entertaining. Cramer was definitely drilling him to answer why the stocked dropped and all McMillon was doing was talking about their forecast. Cramer seems like a strange guy when you watch him. Funny mannerisms.
I like Under Armour based on Peter Lymch model. Everyone I see now where’s that brand. Used to be pretty ugly and cheap looking but much better now.
Congrats on WMT, you called it and played it……nice.
Thanks Harry for mentioning how Saudi Arabia is destroying the poor country of Yemen. Sadly they are destroying it with blessing of USA and UK. I came from Yemen in the early 80’s and Yemen was poor but peaceful for the most part. KSA rulers are the most corrupt monarchies in current history but they have the money and they use it influence other poor Islamic countries to follow their doctrine.
Best place to look for old, out of print books: http://www.bookfinder.com/