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Strategies & Market Trends : Value Investing
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To: Sam Citron who wrote (8761)10/25/1999 2:49:00 PM
From: Jurgis Bekepuris  Read Replies (1) of 78659
 
Sam,

Sorry, I am really not interested in retailers.
Never saw any franchise value in them - even WalMart and
Home Depot. I know that
Buffett (or Munger) love Costco, and BRK has all these
furniture stores, and I kind of understand the
reasoning, but I'm just not interested. I feel that
there are too many ways to screw up and too few to do it
right. High capital cost and few ways of getting
high ROE. You have to be perfect with Dell'y model
(everybody repeat: inventory turns!!! :-))))

E-tailers have advantages (no fixed costs), and
disadvantages (no merchandise *feel*, shipping costs
for them and the customer, cutthroat pricing).
I feel that AMZN is carving a nice niche by providing
pretty pleasant shopping experience and referring to
other shops and auctions. Their search and reviews are
great. They have some pretty rare books and CDs.
But I still shop for lower
prices than AMZN, even though it's the first site I visit.
And I get 5% off by paying using e-card. So I don't
even put a valuation on it. No idea about any other
e-tailers.

It makes sense to buy retailers at net-net or some other
extremely low valuation for trading, but once again it's
not my turf. Ask James and Mike Burry.

Jurgis - still confused about BRKs purchase of MEC
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