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Wal-Mart CEO Comments on Economy

For my money, you can ignore everything coming out of Washington on the subject and simply listen to Wal-Mart’s (WMT) CEO. Matt Laure actually does a good job here. As much as I criticize him here, he deserves kudos when deserved.

Key Points:

– “A lot of stress still in the system”
– “This is not a V recession that we just bounce out of”
– “When people start buying more expensive cuts of meat, we may be coming out of it”
– Children’s apparel sales stronger than adults. “Mom and Dad will sacrifice but they will not deny their children”
– On increasing Wii sales, “Outside entertainment is being cut back on”

Visit msnbc.com for Breaking News, World News, and News about the Economy

This goes to my assertion that the recent market rally is overblown and contrary to recent pronouncements from Obama and Bernanke (green shoots showing), we are far from the end of this.

Those buying equities today must be extremely careful they are buying them based on the actual current situation of the company, not what you HOPE the economy will be doing in 6 months to justify today’s price. After a 20% market run, should the economy be as bad as today in October (very likely), you will have discovered you overpaid today for that stock.

My recent purchases of General Growth Properties (GGP), RHI Entertainment (RHIE) and Natural Gas (UNG) (yesterday) do not depend on an economic turnaround to justify their current valuations or the case for appreciation. All three have an investment thesis independent of the overall economy and should it improve, it only enhances the thesis.

Unless we get a dramatic correction in the market, I just think that is the only play right now for the vast majority of stocks out there.


Disclosure (“none” means no position):Long all stocks listed above

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23 replies on “Wal-Mart CEO Comments on Economy”

I’m puzzled. You said in a previous post that you preferred Exterran (EXH) over Nat Gas. Could you develop on why you bought Nat Gas and not EXH? Is it because Nat Gas price increase will occur sooner than EXH value?

Thx for your answer and your site, one of the best on the web!

EXH as run >10% since i talked about it. (note to self, buy before you blab)

waiting for it to come back and wanted to start building gas position

have been out $dxo for a while, sold $3.11 i believe.. (follow on twitter for updates)

just started buying $ung so for now it is not significant at all.

held it for about 3 months..when oil hit $55, thought it too pricey

think we may see low $40’s again

i usually post them here real time, i just bought the ung late yesterday..

yes still in bgp,dow,wfc,wmt,pm,ung,ggp,rhie,an,

do you ever originate your own ideas, or just solely copy what gurus like ackman and klarman do?

last i checked neither of them were in ung,pm,an,wfc,dow,wmt or shld (was in that before bill)

so that leaves ggp,rhie and bgp that we share..

anything else?

The “insult” wasn’t me, I’d leave my name but having trouble with Google.

Thanks for answering on DXO and BGP!

figured…

yeah, google can be odd at times

welcome…i do think next time i go into oil it will be uso/dxo mix though. dxo itself is stressful

an – lampert
shld – lampert
wfc – buffett

and then wmt is also a buffett investment. or grouped with pm and dow, they are all just large caps that are unlikely to produce anything more than a few points above the index over the long term.

it just seems that you talk a good game, but your portfolio doesn’t really match up.

your opinion…

you clearly have not followed so you are not aware of entry points…

ggp cost .49 current .99 for ex..

as for the rest, time will tell won’t it..

follow buys and sells on twitter..all there to see …

bgp…4 and change…

some others?

dow was bought recently $6.80 last trade 11+

pm was a freebie from mo spin that was bought a decade ago and has a cost basis of $2.50

also got kft from that $27 share that was sold

wmt was bought summer ’07 at $42 or 20% lower than today

its all there in the blog/twitter

follow along…

can’t help but notice your is not listed anywhere

the point is that these arent original ideas. why dont you just say “i copied bill ackman at 36 cents and made money.” but what would you do without being able to copy other investors?

it is disingenuous to bill yourself as a real investor when your really just copying other peoples ideas, hence why you are getting defensive.

it just strikes me that you are closer to being jim cramer than you are bill ackman. you should be honest about this.

so, based on that logic, unless i am the only shareholder (or an original one) of a company, i then copied someone?

not being defensive, just pointing out you clearly are new here and have not followed along…

i love the irony of being called disingenuous by an anonymous poster..

pot, meet kettle..

again..your results?

its not like you read thousands of 10-ks and just happened to come across companies like GGP or RHIE. you just looked at what ackman was buying and blindly copied him.

i’m just saying, if writing articles brings in more income for you than actual investing (which is obviously the case – why else would you waste your time?), you should be clear about this. dont present these ideas as if you actually came up with them yourself.

no one reads thousand of 10-k’s

ackman is not in rhie

i ALWAYS state when significant investors I follow have stakes in a company..ALWAYS

please read more of the blog, you clearly have not been a reader for any amount of time…both the GGP % rhie investment were fully credited ackman and klarman both on video and in print

writing makes me a mush better investor…the two compliment each other

warren buffett read thousands of 10-k’s each year when he was coming up.

fair enough on your other points.

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