What Investors are saying about Wal-Mart’s Competitors
While SuperValu (SVU- $1.80) is set to engage in a price war (which it will lose) with Wal-Mart, the more interesting activity is occurring at Amazon:
361 Capital writes… Amazon is going for every retailer’s jugular with local, same day delivery.
Amazon is seizing the opportunity to expand its network of U.S. warehouses – it had 34 at the end of last year – so it can place its merchandise nearer to big markets and offer same-day delivery to more consumers. That will erode one of the last advantages of the physical store: instant gratification. If someone needs a pack of nappies, a mobile phone charger, or bottle of cough medicine this evening, the only way to get them immediately is to go to a local store such as Wal-Mart, Best Buy, or Target, which all helped fund the anti-Amazon lobbying. But if Amazon can deliver to work or home in three or four hours – and at little or no shipping cost to the consumer – then why bother with the store? Source: Financial Times
And finally, Amazon and the economics of instant gratification - Read about how Amazon is playing to American’s need for speed.
Making the Case for Costco. At 24x earnings, Costco is not cheap, and may be overvalued, but is there an argument that Costco is the company with the greatest ability to undercut its competitors on price? Author lays out the case here.
1962. The year that changed retailing. Full Story.
VENDORVILLE
Footnoted.com chop blocks Wal-Mart supplier Smithfield Foods over related-party transactions.
OF INTEREST:
Soda vs Pop on Twitter
A Real-time Fashion Indicator - Company videos what people are wearing in Paris, Milan and Antwerp, uploads and analyzes the color pixels. Pretty slick.
PERSONAL FINANCE TIPS
If your broker
tries to get you in most IPO’s, he/she is not helping you. We spent 15 long years working in the
institutional investment business and saw firsthand how and why these deals are
sold and priced. You don’t get to pick
the price you pay or when you buy it – the seller decides. Various academic studies confirm that about 4
out of 5 IPO’s underperform. Exhibit A: Facebook.
Annuities in 100 Words
Barron’s is out
with their guide to the best annuities. Consider
the math on the best annuity in their table – an immediate annuity from Pacific
Life. If you are 60 years old, you give the insurance company $200k in
exchange for $12k/yr for as long as you live.
When you die, they keep the money.
Die in 10 years and Pac Life keeps $80k ($200k - $120k in
payments). Stop. Instead, keep your $200k, invest it in high
quality treasury or municipal bonds and take home $8k yearly. Did I mention that you get to keep your $200k? Here’s the article.
Chipotle: A lesson
in high P/E investing. When the growth slows, look out below.
Parting Shot(Great stuff from Josh Brown):
Daddy, what do you do at your job?
Boston Mountain Money Management, Inc., is a boutique financial planning
firm for executives or individuals with complex planning/investment needs. The founders have over 35 years experience
working closely with executives of publicly-traded companies.
The authors and clients have a position in the shares of Wal-Mart Stores, Inc. at the time of this publication.
