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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (62978)	12/17/2019 5:52:08 PM
From: bruwin	1 Recommendation Recommended By Lance Bredvold Respond to of 78774

With regard to your ... "Mr. Buffett has said one of his biggest errors was not buying Walmart when he looked at it for a substantial investment. It's been reported recently that Charlie Munger, a director of Costco, has increased his Costco shares. It's apparently not known whether that's due to options or vesting of restricted units or something else." .... I'd like to refer to what I've posted elsewhere on SI ..... I would say that the likes of WALMART and COSTCO fall into Item (4) as to what "Buffett Prefers to Invest In". WALMART reportedly has about 26% market share and COSTCO has about 16%. They no doubt occupy "quasi-monopoly" positions and would therefore make them attractive to Buffett and Munger. These dominant positions I'm sure ensure that the shares of those companies feature prominently in many of the portfolios of Fund Managers. We see them sought after in the market as in ..... But then we have KROGER (KR) with about 9% reported market share, and we see ..... I would say as one looks at these Store companies who have less and less of a market share, and no effective monopoly position, they become more in line with "The Price of the product becomes the primary factor for the consumer ...." and they then enter into fierce competition with their competitors and end up with relatively thin margins and become more vulnerable in terms of their Bottom Line performance. My previous post was put out there to highlight the "common denominator" with these types of companies, namely low margins due to intense competition making them vulnerable to any problem(s) that may incur and which could turn a small positive net income percentage into a negative one.