Chungst

Sears, Target, Office Depot, Walgreen: Bargains in the Retail Basket

"This unique strategy is based on historical trends and levels of price to adjusted book value, and can be applied to stocks and indices."

I sorry to say, but that sounds like investing by looking in the rear view mirror. If asset valuation metrics were insane in the past, do we than hope for the return of these insane metrics like some diety worshipped in ancient ways? Perhaps we should read entrails and bones as well. The intrinsic value of a business is based on two valuations -- (a) its liquidation value or (b) its going concern value.

Any sound value investor should heed Mr. Munger's counsel and apply the wisdom of Talk 4 (2nd edition) from his book "Poor Charlie's Alamanck" and just ask the simple question how will a company like WAG survive the pressures of competitive destruction over the long term (i.e. the next 10 years)? I try to look into the future as best as I can and all I can see is that WAG in ten years from now will be a weaker company than WAG today based on the strength of WAG's competitiors, the ongoing competitive landscape in general, etc.