Raging Bull on Wal-Mart
Asian markets were quiet. The Hang Seng was off 0.7% and the Nikkei was closed on holiday. Meanwhile European stocks were in negative territory earlier this morning. And here in the US, we’re currently trading lower.
Here’s what I’m focused on this morning:
Wal-Mart (WMT):
Fellow Minyan Justin Sharon points out that HSBC slapped an Overweight rating on the large discount retailer.
My two cents:
1. Some think I should get off my discount horse. But I believe that frugal consumers will be plentiful in the near run and that nobody's going to knock this company out of the box in the near or immediate term. This is why I’m a raging bull.
2. The “benchmark” (as I like to call the company) is expected to grow its bottom line more than 9% from this year to next. That’s not child’s play, especially for an organization of this size.
Potash (POT):
After the bell on Friday, the fertilizer company disseminated a release. Like many releases on a Friday after the bell, the news wasn’t so hot: It basically lowered the earnings bar.
Per the release: “Potash Corporation of Saskatchewan Inc. (PotashCorp) today announced revised earnings guidance of $3.25-$3.75 per share for full-year 2009, shifting from a range of $4.00-$5.00 per share (1) provided in July 2009.”
My feel:1. It's not the end of the world, but that's a big drop. Now I’m wondering if that number is indeed doable.
2. With the Street at $4.16 a share, I think estimates may be coming down along with share price.
3. The $7.96 a share estimate that’s out there for 2010 is a bit rich.
4. I’m not saying it’s going to go there, but I’d be more interested if it were to pull back to the $70s.
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Feel free to read "The Flow of Trade in a Global Economy" by Lance Winslow. There is one quote from his article tat comes in mind. "Now let us look at Wal-Mart again; you buy a product there, 6% goes to the employees, 10-18% is profit to the company, 25% goes to other costs and 50% goes to re-stock or the cost of goods sold. Of the 50% about 20-25% goes to China, a guess, but you get the point. Now then, how long will it take at 433 Billion dollars at year for China to have all of our money, leaving no money flow for us to circulate? At a 17 Trillion dollar economy less than 40-years minus the 1/6 they buy from us. Some say that if we keep putting money into our economy, it would take forever, but if we do not then eventually all the money flow will go. If China buys our debt then eventually they own us, no need to worry about a war, they are buying America, due in part to our own mismanaged trade, so whose fault is that? Not necessarily China, as they are doing what's in the best interests, and we should make sure that trade is not only free, but fair too."
Also, think for a moment about George Washington....yes the man tat is on the US dollar bill....
Take the time to read his farewell address after only eight years of serving his country and than ask yourself tis....
How do you think George feels being sent overseas in return for all tat foreign so-call cheap items and being left in a foreign bank because the American worker doesn't make anythig for the foreigners to buy. Cheap items didn't make tis great union of 57...oops! 50 states the greatest place on the face of tis Earth.....the American worker (union and non-union) did. You can't have a strong country without having a strong currency and you can't have a strong currency unless you keep it floating around within your 50 states.
Tis is why the store with the star in the name puts 95% China made items in their stores in China....to keep their "yuan" in their country helping the nice people there. And with only 5% left for all the other 182 country's tat make stuff including the United States of America....tat doesn't produce very many jobs outside of China.
Being an old person myself and knowing how it wus back in the 40's, 50's and 60's in tis union of 50 states....I look at George each time I pull him out of my billfold and make a promise to send him out for items made in America so after floating around helping each hand he touches jus maybe one day he will shake mine again.
http://www.joc.com/node/413508
Sincerely,
Lance Winslow
