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Tom Au, CFA
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In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s.
My book:
A Modern Approach to Graham and Dodd Investing
  • Why Retailers Should Worry In Spite of Strong Traffic 1 comment
    Nov 27, 2010 12:59 PM
    With some intermittent exceptions, retail store traffic has been strong for most of this year. Satellite analysis shows that the post-Thanksgiving volumes are also strong, though not superlative. That's good news for retailers, right?

    To use the words of an old song, "it ain't necessarily so." Why might that be? The first reason is because of all the discounting that has been going on. Sure, sales volumes are brisk. But that's because price cuts have lured people into the stores. That translates into sluggish sales growth in terms of DOLLARS, and compressed margins.

    The second reason is already apparent in the consumer staples area; people are now "downtrading" for cheaper, lower margined "brands." Companies like Proctor & Gamble are suffering more from this like no time in recent memory. If consumers are doing this with necessities, how much more will they do this more discretionary items?
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  • TeresaE
    , contributor
    Comments (3041) | Send Message
    I look to sales/discounts to gauge how the economy is doing. According to that metric, it isn't doing well. Every business is cutting their own throats to stay in business. If you have cash, you can get some great deals on things you don't really need.
    29 Nov 2010, 11:27 AM Reply Like
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