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  • Costco's Canadian Success Story [View article]
    What you say is very interesting. Of course the fact that there are many people in Canada of Scots descent might have something to do with thriftiness, but I am still slightly perplexed because actually I am one of those shoppers who doesn't give a damn about brand names and just shop for the cheapest commodity, and a couple of months ago I went to Costco in Jacksonville, FL fully expecting to take out a membership with my debit card burning a hole in my wallet, and actually left without taking a membership after reconnoitering the store with a mental list of commodities that I would like to buy in bulk for less and finding that what Costco had would not save me any money over Walmart or in some cases Dollar Tree.

    What I saw was that Costco had a lot of rather expensive branded products in large packs, somewhat discounted to be sure, but not offering any great value on basic commodities., except perhaps on meat.

    The other thing I noticed was that the store was much more geared towards wholesale foods than retail. I suppose if you have a chest freezer you might want to fill it with meat bought in bulk and save some money that way. (Canadians can probably just park their winter supply of meat in the garage without it thawing out.) But a lot of the people I saw in Costco looked like they were buying for a restaurant or small business.

    This makes me suspect that the successful Costco retail stores are probably a bit different from the store I have seen in Jacksonville, perhaps in subtle ways providing a mix of commodities that they don't provide here in Florida that suits the Canadian population.

    Of course it might be that the products I was looking for and pricing, when I could find them, were quirky, but just for the record they were:

    Oatmeal, either old-fashioned or one-minute
    Green tea bags, large size
    Peppermint tea bags
    Cilantro fresh or dried
    Jalapeno peppers
    Frozen strawberries
    Wholewheat or rye bread flour
    Frozen strawberries
    Frozen blueberries
    Plain whole milk yoghurt
    Brown rice
    Powdered milk either skimmed or whole milk.
    Parmesan cheese.
    Dried onion soup mix.
    Bleach tablets
    Laundry detergent
    Dishwashing soap
    Toilet paper
    Kitchen towels
    Woolen socks
    Nov 27, 2014. 11:47 PM | Likes Like |Link to Comment
  • A Deeper Dive Into Wal-Mart's Pros And Cons [View article]
    No, I have never even seen a Trader Joe's as they are not prevalent in Florida which is very much Walmart territory. Trader Joe's is owned by Aldi Nord, so privately held as you say.

    I know that Aldi is making considerable inroads in the UK and that their model is somewhat similar to Save-a-Lot with smaller supermarkets, a limited range of goods, and lower prices. Personally I do not find Save-a-Lot a very good place to shop for food, though some bargains can be found in meat and vegetables.

    Trader Joes is just food, so would not much affect Walmart, which sells almost everything from car tires to sewing machines to tomatoes, but certainly if it expanded vigorously might impact sales of supermarket chains like Publix and Winn Dixie, which are ubiquitous in my state.

    Perhaps where Trader Joe's might affect Walmart and other supermarkets is in presenting a more friendly "image". Although I shop regularly in Walmart, I have to say, to put it kindly, that the ambience of the stores is totally utilitarian and the "Welcome to Walmart" and "Have a GREAT evening" mantras are totally robotic. The same goes for Publix, except that the Publix staff appear to have attended more acting classes.
    Nov 26, 2014. 10:07 AM | Likes Like |Link to Comment
  • A Deeper Dive Into Wal-Mart's Pros And Cons [View article]
    I bet you buy some of your seeds at Walmart!

    I also have a home in the Dominican Republic and living there makes me realize how profoundly companies like Walmart have affected the American landscape--and not always for the better.

    To be honest, I do not particularly enjoy eating things like chicken feet and pig's feet. Bessie Smith sang "Gimme a pigfoot and a bottle of beer", but I would just as soon pass on the pigfeet. However I like the idea of me deciding what parts of the animal to eat and what to give away.

    When I go to the butcher shop in the Dominican Republic, there are beef carcasses hanging from the ceiling and I can point to the piece I want, then have a guy in rubber boots and a blood spattered apron standing in a pool of blood slash at it with a machete to remove the cut I want.

    When I go to Walmart, I see hamburger meat on sale with no idea whatsoever of its provenance, what state it came from, what breed of beef cattle, what body parts are included--nothing. And the same goes for many foods (not just Walmart, all the supermarkets) where even the country of origin is often available for the consumer, presumably because the retailer does not want you to know what you are eating.

    However, Walmart is not going anywhere and people have to buy stuff. Yes, you can go to Costco if you want very large portions of things that keep and you have enough storage or refrigeration and there is a Costco within range. (But most people live in smaller homes.) You can buy things online, especially if they are small, postage is cheap or you have Amazon Prime, and it is not worth burning the gasoline or your own valuable time to go to Walmart and hunt around.

    I think Walmart still has some room for growth because it has reached such a critical mass that it cannot be stopped, and although competitors may nibble around the edges of some of its market segments, there is probably also room for growth overseas by means of buying out other supermarket chains, like ownership of ASDA in the UK, which seems like a profitable concern, although as a division of Walmart it does not report independently.

    I would not be surprised to see Walmart buy out PriceSmart (PSMT) and then expand its footprint in the Caribbean and South and Central America.
    Nov 25, 2014. 10:36 AM | Likes Like |Link to Comment
  • Is Wal-Mart King Of Consumer Goods Retailers? [View article]
    WMT is so large that really the company is a barometer of the economic health of retail customers in North America and to some extent the world. WMT has done well recently to pick up after the hits taken by the cuts to the Food Stamps (SNAP) program, but I think there will not be a lot of spending on high margin items this Thanksgiving and Christmas, so any irrational exuberance must be tempered, though right now the stock is definitely on a roll. Also the recent article from Goldman Sachs research showing that 50% of US wage earners make $20 per hour or less puts a ceiling on consumer spending, though the drop in the price of gasoline is perhaps a chink of light for hard pressed consumers.
    Nov 19, 2014. 09:59 AM | Likes Like |Link to Comment
  • A Deeper Dive Into Wal-Mart's Pros And Cons [View article]
    Yes, it is true that there is a certain percentage of consumers who object to Walmart on ideological grounds, and it is certainly true that they have driven many smaller retailers, especially independents, out of business.

    I am actually old enough to remember a time when there were no supermarkets and foods had to be obtained from the butcher, baker, grocer, confectioner, fishmonger, greengrocer, and candlestick maker. Well, maybe not the candlestick maker. To be honest, as a consumer and as a cook I do not care very much for any of the supermarket chains. Why have they all unilaterally stopped selling rye bread making flour? When did anyone last see a fresh chicken? Or lamb or goat meat? Or fresh milk? Why did all yoghurt suddenly become Greek overnight or else fat-free with added cornstarch to replace the fat? Who agreed to have high fructose corn syrup added to all prepared foods and to bread. I could go on for ever, but my family has to eat and the supermarkets have a virtually monopoly on food except for the junk food outlets which are even worse.

    But like it or not, Walmart IS America today, and Walmart IS America, so it isn't going anywhere.

    In a few more years there will only be a handful of companies left in retail business anyway--Walmart-Target, Amazon Penney, Apple Hathaway, MicroGoogle, United Dollar Fifty Stores, Exxon-BP-Subway, Goldman Starbucks, Phillip Morris & Johnson, and Ali Baba and the Forty Thieves will rule the world and maybe a few companies like Costco will be allowed to survive to create the illusion of competition under the Jenna Bush presidency.

    Long WMT, bu would sell some $85 calls.
    Nov 19, 2014. 01:42 AM | Likes Like |Link to Comment
  • A Deeper Dive Into Wal-Mart's Pros And Cons [View article]
    I don't think comparisons between Costco and Walmart on a per square foot basis have much validity unless it can be shown that Costco can increase sales in a particular market by increasing footage.

    The nearest Costco to where I live just outside Jacksonville, FL is 17 miles away. There are 6 Walmart Supercenters and a Sam's Club that are closer. The Costco is located in a congested area with a lot of traffic and traffic lights that is a bit difficult to access from the Interstate Highway I-295. The Walmarts are all easy to get to.

    I went to visit the Costco a few weeks ago, intending to take out a membership card. However, after looking around the place, I decided not to, as I did not think there was any cost benefit to me. The prices on the basic foods I consume did not offer significant savings over Walmart, nor did the other goods like beds or furniture offer any particular advantage over online purchases that include home delivery.

    However the main problem is that Costco is really a wholesale warehouse offering a useful service to small businesses, restaurants, institutions, and perhaps large families, but not particularly useful for smaller households buying food as it has to be bought in large quantities that can lead to wastage, thus negating any savings.

    When I went to Costco, I was looking at the pricing and availability of certain items that I use a lot, to whit 1-minute oats, frozen strawberries, sesame seeds, dried garbanzo beans, and plain full fat yoghurt. The first four items were completely absent and the third offered no price advantage over Walmart. What they sell a lot of are expensive branded pre-prepared meals which are admittedly discounted somewhat, but still expensive relative to buying commodity ingredients.

    So I don' think they are competing directly with Walmart on groceries. Yes, Costco is expanding from a relatively small base, but one wonders to what extend opening more stores in densely populated areas would cannibalize the customers attending existing warehouses or serve unmet demand.

    Why does Walmart have 6 supercenters closer than my closest Costco? Does this mean that if Costco opened another warehouse in my area that 3 Walmart supercenters will be put out of business? I doubt it.

    Other points:

    Costco memberships only cost about $1 per week, so even for lower income families, this is hardly an issue, otherwise everyone would be rushing to buy Costco cards at tax refund time. Nor is it a really significant source of revenue for Costco. More of a security measure to keep unidentified customers, riff-raff and shoplifters out of their stores.

    Regarding Walmart being affected by reductions in SNAP. Walmart WAS significantly affected by reductions in SNAP last year, but recent results suggest the company is moving forward again. The biggest factor on the margins may be growth in Internet sales. For example I have noticed recently that when I have searched for certain items ads have been popping up on my screen offering delivery with pickup at a local Walmart at very competitive prices. Not quite the same as delivery to the house, but still competitive, given that Walmart already has its own distribution system in place and does not need to use USPS or Fedex.
    Nov 18, 2014. 02:38 PM | 4 Likes Like |Link to Comment
  • How Much Will Shareholders Benefit From Microsoft's Culture Change? [View article]

    Also see this news today about Real Madrid football club entering some kind of deal with Microsoft. Nadella is really picking up the pace and if Cristiano Ronaldo is using the Surface 3 to confuse defenders, then very likely a few of his 31.3 million followers on Twitter will follow suit.
    Nov 18, 2014. 01:39 PM | Likes Like |Link to Comment
  • How Much Will Shareholders Benefit From Microsoft's Culture Change? [View article]
    A friend of mine at work yesterday mentioned that he was thinking of buying a Surface tablet to replace his laptop. This was a spontaneous comment and the conversation was not related to any kind of Microsoft/ Windows proselytizing on my part or part of any discussion about investments.

    One swallow does not a summer make, or even two, but anecdotal evidence could be a precursor to a trend worth looking out for.

    However my friend also mentioned that he was looking in the device in the Microsoft store in Jacksonville, Florida, while the nearby Apple store was doing such good business that people were lined up outside waiting to get in, with police officers marshaling the lines.
    Nov 18, 2014. 12:49 PM | Likes Like |Link to Comment
  • How Much Will Shareholders Benefit From Microsoft's Culture Change? [View article]
    Surface is pricey, but it is a very nice device and more versatile than the iPad. For example, you can connect a camera to it directly, or a memory card. I can see that there will be users, especially in business, who will find the Surface more useful than an iPad, even if it is never more than a niche market.
    Nov 14, 2014. 08:17 PM | Likes Like |Link to Comment
  • Microsoft - Potentially Higher Payouts To Come, But The Capital Gains Have Already Occurred [View article]
    Told ya so!
    Nov 14, 2014. 10:33 AM | Likes Like |Link to Comment
  • How Much Will Shareholders Benefit From Microsoft's Culture Change? [View article]
    Windows phone will probably never add up to much in the US where Apple and Android are firmly entrenched with the big networks, although Cricket--a division of AT&T-- is offering a very good deal on Windows phones using the AT&T network that will appeal to the more economically minded and does not have subsidy priced into the calling plans. (The only downside is that Cricket does not allow the phone to be used as a hotspot-although there may be ways around this.)

    However I would not be so sure about Europe and South America where the cost of device ownership is a much more significant factor, because extra minutes for calling and data can be bought on every street corner when cash permits. In Haiti, I was even able to buy Digicel minutes from street vendors on the kerbside without exiting the car. Also it appears likely that European users may prefer to buy a phone outright rather than get into the credit-subsidy-contrac... scenario that US customers usually select.

    If Microsoft can get phones into the hands of users, the real future profit may lie in driving business to Bing search which has improved beyond all recognition and is now more-or-less equal to Google, and if they can get the phones onto the networks of more agile upstart network operators with street smarts like Digicel, there may still be a future.

    Remember it is still only just over 7 years since the first iPhone was sighted on planet earth, and things can change more quickly than one could imagine.

    Incidentally I posted a few months ago that I was fairly sure that Microsoft would make a run at $50 and today it is only cents away from the target. A good time to take some profits as there is bound to be resistance around the psychologically important $50 price point.
    Nov 14, 2014. 10:21 AM | 2 Likes Like |Link to Comment
  • Is Casual Dining Dying? [View article]
    As incomes fall relative to the price of food, casual dining meals are no longer seen as an affordable alternative to eating at home since they offer lousy food for high prices in an impersonal atmosphere. I tried a meal at Applebees once. I was starving hungry. I could not find anything that looked remotely edible on the menu--the whole thing looked disgusting--but ordered what looked like the the least worst alternative, ate half and left, because it was as disgusting as it looked.

    However there will always be people traveling who need to get something to eat, so those restaurants found at Interstate intersections and in airports will continue to make good money from a captive clientele.
    Oct 27, 2014. 11:32 AM | 9 Likes Like |Link to Comment
  • It's True, Apple Is About To Crush Microsoft With Business Customers [View article]
    While this may be true of the IT industry, I believe it is much less likely to be true in industries like health care, government, or the military, where vast numbers of computer terminals are in use.

    When considering which stocks are most likely to show the most appreciation in the short and medium term, analyzing the state of every different market in the world is an almost impossibly complex task, and even if Apple is making considerable inroads in corporate IT in the US, that may be much less the case in the rest of the world. Windows is widely unpopular with Seeking Alpha authors and readers in the US, but this unpopularity does not immediately translate to the rest of the world.

    My impression is that everyone wants to get onto the Internet for one thing or another for personal reasons, but that most markets for both business and personal devices are pretty price sensitive when there is little to choose on performance. The continued worldwide roll-out of 4g will be a great leveler in the long run as it is the first iteration of the wireless net that is truly functional for both business and recreational purposes.

    If APPL is going to dethrone MSFT in enterprise computing, right now will not be the last opportunity to get on board. Right now I am fairly certain that failing a general market collapse, MSFT stock will at least make a run at the $50 mark over the next year.
    Oct 25, 2014. 08:32 PM | Likes Like |Link to Comment
  • It's True, Apple Is About To Crush Microsoft With Business Customers [View article]
    "Corporate Windows PCs last about 1.5 years now on average (factoring in corporate laptops as well)."

    They last a lot longer than that in my workplace even if they are used 24 hours a day and 365 days a year, and in any case they have to be depreciated over a longer period than 1.5 years for tax purposes, five years, I think.

    Desktops have the advantage that if you spill a cup of coffee, you will probably only have the cheap cost of replacing the keyboard. Laptops are surely much more vulnerable to damage, especially in transit, not to mention if they are taken home they may be exposed to children and pets.
    Oct 23, 2014. 01:46 PM | 3 Likes Like |Link to Comment
  • Will The Samsung S6 Overtake The iPhone 6? Probably [View article]
    It is certainly interesting to compare the strategies of different companies and trying to see where they will go in the long term. I somewhat agree with Blair that Microsoft's Windows phone and its ecosystem may have more potential for growth, because of the lower price of entry.

    An iPhone is a wonderful device, but not the kind of thing a student or a person in their first job post college can afford, especially not the the developing world. But the student or new graduate who gets a cheap Windows phone with their second paycheck, after sending the first one to mom of course, is quite possibly the doctor or professor, or leading scientist, or politician of the future who will be able to afford much more expensive devices for themselves and their family in the future. So, yes, this lack of an entry level phone for Apple may come back to bite them a generation down the road. Of course most of us don't care about that far in the future, except that stocks always have the future priced into them years and years ahead. Look at Tesla.

    I should say that I am currently using a Nokia Windows phone that cost me only about one thirteenth of the cost of an iPhone, and yet by objective standards it is a wonderful device. Apart from calling and messaging, which it handles with aplomb, my main use of it is as a substitute short-wave radio and I can tell you that it beats the pants off short wave radios that would have cost hundreds of dollars a couple of decades ago and needed a massive antenna to boot, and only worked at certain times of day and weather conditions. Now I can potentially listen to thousands of international radio stations in real time while driving on the Interstate in urban areas in a storm with few interruptions in service.

    Looking at what a device can do technically is one thing, and easy to do, what looking at what consumers may want to do with a device in countries and cultures very different from one's own is much harder to do.
    Oct 5, 2014. 12:20 PM | 2 Likes Like |Link to Comment