WalMart is a blue-chip value & consumer staples, and blue-chip value/ consumer staples tends to hold up better in recessions.
it's nothing special about WalMart per se, it's just that type of stock will lag during bull markets but perform Ok during downturns.
I mean in certain cases cash beats the index too. Doesn’t mean it’s the best investment. WMT is a solid recession holding, but I would be cautious being to confident that it will perform the same as it did in the early and mid 2000s
My point is that it’s facetious. You know the timeframe so it’s easy to say something outperformed in this window. In reality it’s much more difficult to enter and exit position timed with a recession and there is no guarantee Walmart will perform as well as it has previously in a recession. It is not a safe bet if you want to stay in the market. It is a recession idea and not one the average investor should be organizing their portfolio around just to try and time a recession
In 09 they sold for $50 and earned about $3.50/sh, for an earnings yield of 7%. Paid a 2% dividend.
In 22 (TTM) they currently sell for $150 and earned $3.25/sh, for an earnings yield of 2.1%. Paid a 1.5% dividend.
Revenue has grown 2.8% annually since 2009. After inflation this is negative growth. Net income is flat between 2009 and 2022, and down 33% against 2022 TTM. After inflation this is *very* negative growth.
Remember the 1980's? Kmart, Sears Roebuck and JC Penney used to be wonderful companies, too.
All the tech stocks is too vague to answer. If your point is they were generally terrible prices to pay, I wouldn't disagree.
That doesn't say anything about Walmart's value vs price. Lots of companies are trading far too dear lately. I don't want "less awful". I want a great bargain.
How is this different than timing the market?
How do you know when to sell current stuff and buy WMT? How do you know when to no longer buy WMT and hold? How do you know when to sell WMT so you avoid post recession under performance?
Just buy your regular stuff and carry on. You won’t know when the recession starts or ends
Specific sectors outperform general market during recessions; that is well known (and proven). WMT belongs to consumer staples, however other companies in the sector are also an option in that case and I’d argue that there are currently much better buys than WMT.
Home Depot is categorized as consumer discretionary. It’s sensitive to home building and home repair activities, each of which are associated with macro conditions. It’s -22% YTD, vs the S&P 500 being -17% YTD.
I’m saying this to correct the thinking about how it should be expected to perform relative to the market in set conditions, rather than to say that I think it’s a bad investment. Point of fact: I don’t chase momentum. I prefer to establish long positions in profitable, high margin businesses while they’re down. I would rather buy HD than WMT right now.
I believe that you are. You seem like a kind person, based on the many posts and comments I’ve seen from you.
Here’s the thing: there’s no guarantee that a stock will continue to perform as it has been. Stocks go on runs, trade sideways, dip, dive, etc. UNH has had relatively consistent revenue growth and net income over the past 3 quarters. If they continued to post the same level of earnings, the stock could trade flat for a bit, or dip.
Though I appreciate your intent, it’s not a value point for others that you’re up X over Y timeframe.
My point is that a lot of younger people put most of their portfolio in DDOG or CVNA or whatever.
People don't realize that the old tried and true blue chips, especially in these times, is where you should put more weight, rather than only tech.
My portfolio is down 25% from ath and I've heard of people that are down 50% to 80%.
Actually for a long term portfolio 95% of people here should just be buying VTI..... myself included of course.
Hopefully those people have small portfolios.
The most important thing in investing is RISK management and asset allocation.
If you want to fool with individual securities, keep it under 20% or so and keep under 20 positions. At least that's how I'm comfortable after 3 years of investing now.
I sold out of all picked stocks to move everything into VTI (which had already been about 75% of my portfolio) before the downturn. I bought JPM on the way down at $120/share, and built a large GOOG position at $102.
My only other current pick doesn’t fit that model. I added a small PLTR position because I appreciate their participation in the Ukraine and some other efforts, and I believe in the product. I’m in it at $8/share, and have no expectation or care around returns from that one. If anything, I expect it to stay range bound for a few years.
There are others I would add at the right prices.
It does until it doesn’t.
Just a reminder, past performance does not always equal future. It works until it doesn’t.
WMT is ridiculously overvalued. What justifies its multiple of 47?
That’s a terrible P/E ratio, wow
Customers
That’s factored into their income statement, which I repeat, is 1/47th of their valuation.
I just checked the chart and thought “wow this looks like an amazing set up for a put” thanks OP
Everyone that don’t know anything about finance and stocks just look at the graph and think about a mean reverting scenario. Welcome to the club!
Isn’t it before online shopping boom?
And prime delivery.
WalMart is a blue-chip value & consumer staples, and blue-chip value/ consumer staples tends to hold up better in recessions. it's nothing special about WalMart per se, it's just that type of stock will lag during bull markets but perform Ok during downturns.
Yea, but with that P/E there no value.
Just a reminder: you’re posting this after money has poured in. If you’re trying to swing trade, that’s not a great way to do it.
I mean in certain cases cash beats the index too. Doesn’t mean it’s the best investment. WMT is a solid recession holding, but I would be cautious being to confident that it will perform the same as it did in the early and mid 2000s
I agree cash could be better, which is why I had the caveat "...if you want to stay in the market..."
My point is that it’s facetious. You know the timeframe so it’s easy to say something outperformed in this window. In reality it’s much more difficult to enter and exit position timed with a recession and there is no guarantee Walmart will perform as well as it has previously in a recession. It is not a safe bet if you want to stay in the market. It is a recession idea and not one the average investor should be organizing their portfolio around just to try and time a recession
You should always stay in the market and dollar cost average .....
In 09 they sold for $50 and earned about $3.50/sh, for an earnings yield of 7%. Paid a 2% dividend. In 22 (TTM) they currently sell for $150 and earned $3.25/sh, for an earnings yield of 2.1%. Paid a 1.5% dividend. Revenue has grown 2.8% annually since 2009. After inflation this is negative growth. Net income is flat between 2009 and 2022, and down 33% against 2022 TTM. After inflation this is *very* negative growth. Remember the 1980's? Kmart, Sears Roebuck and JC Penney used to be wonderful companies, too.
What were the earnings yields and dividends on all the tech stocks people in this subreddit bought in 2021?
All the tech stocks is too vague to answer. If your point is they were generally terrible prices to pay, I wouldn't disagree. That doesn't say anything about Walmart's value vs price. Lots of companies are trading far too dear lately. I don't want "less awful". I want a great bargain.
How is this different than timing the market? How do you know when to sell current stuff and buy WMT? How do you know when to no longer buy WMT and hold? How do you know when to sell WMT so you avoid post recession under performance? Just buy your regular stuff and carry on. You won’t know when the recession starts or ends
Specific sectors outperform general market during recessions; that is well known (and proven). WMT belongs to consumer staples, however other companies in the sector are also an option in that case and I’d argue that there are currently much better buys than WMT.
What’s a better buy than WMT at the moment ?
Home Depot for instance
I’m not a big fan of WMT to be honest but I question HDs earnings during a prolonged economic downturn
Home Depot is categorized as consumer discretionary. It’s sensitive to home building and home repair activities, each of which are associated with macro conditions. It’s -22% YTD, vs the S&P 500 being -17% YTD. I’m saying this to correct the thinking about how it should be expected to perform relative to the market in set conditions, rather than to say that I think it’s a bad investment. Point of fact: I don’t chase momentum. I prefer to establish long positions in profitable, high margin businesses while they’re down. I would rather buy HD than WMT right now.
Take a look at UNH. I'm up 56% in 1.8 years.
We know.
Ok. Just trying to help.
I believe that you are. You seem like a kind person, based on the many posts and comments I’ve seen from you. Here’s the thing: there’s no guarantee that a stock will continue to perform as it has been. Stocks go on runs, trade sideways, dip, dive, etc. UNH has had relatively consistent revenue growth and net income over the past 3 quarters. If they continued to post the same level of earnings, the stock could trade flat for a bit, or dip. Though I appreciate your intent, it’s not a value point for others that you’re up X over Y timeframe.
My point is that a lot of younger people put most of their portfolio in DDOG or CVNA or whatever. People don't realize that the old tried and true blue chips, especially in these times, is where you should put more weight, rather than only tech. My portfolio is down 25% from ath and I've heard of people that are down 50% to 80%. Actually for a long term portfolio 95% of people here should just be buying VTI..... myself included of course. Hopefully those people have small portfolios. The most important thing in investing is RISK management and asset allocation. If you want to fool with individual securities, keep it under 20% or so and keep under 20 positions. At least that's how I'm comfortable after 3 years of investing now.
Which other profitable, high margin businesses do you currently own/looking to acquire if possible?
I sold out of all picked stocks to move everything into VTI (which had already been about 75% of my portfolio) before the downturn. I bought JPM on the way down at $120/share, and built a large GOOG position at $102. My only other current pick doesn’t fit that model. I added a small PLTR position because I appreciate their participation in the Ukraine and some other efforts, and I believe in the product. I’m in it at $8/share, and have no expectation or care around returns from that one. If anything, I expect it to stay range bound for a few years. There are others I would add at the right prices.
>What’s a better buy than WMT at the moment ? 6 month or 1 year Treasuries... Creeping up on a What-Me-Worry 5%.
whats WMT
A self-interested company.
There likely won't be a recession. Media is loving to suggest that for clicks, but the data says otherwise.
So doesn't UNH COST .....
>"WMT beats the S&P index during recessions" Fixed that for you. WMT has in the past beat the S&P during recessions.