We've been light on the equity news for the last couple months, mainly because I'm in the "Vanna, I'd like to buy a clue" mode. Honestly, besides Ben Bernanke and a server farm in Jersey, who really knows what's going on?
So, for our public pronouncements we've retreated to the comfort of a couple mega caps, GE and WMT with the emphasis on the latter.
Just call me Mr. Excitement.
It's actually not as boring as all that. Last night when I decided to do an update I initially titled it "Do Not Short Wal*Mart". This morning it set another all-time high.
With the DJIA down 136, component Wal*Mart is up $2.20 (2.97%) at $76.14.
Dow component GE is down 15 cents at $22.47.
Take a look at yesterday's "Chartology: Here Comes Your 19th Market Meltdown".
Here's the latest on Sam Walton's baby, from BusinessWeek:
Wal-Mart’s New Prepaid Card May Be the Best Deal Yet
And from MarketWatch:Wal-Mart Stores (WMT) and American Express (AXP) are taking a big plunge into the prepaid debit-card market with a new card called Bluebird. The card has many features that are standard in regular bank accounts and seems to have remarkably few fees—which have long been the scourge of prepaid cards. Bluebird is the biggest sign yet that prepaid cards are evolving from a product for the poor and unbanked into a more mass-market offering that competes with regular checking accounts.NerdWallet, which maintains a database of prepaid cards, says Bluebird is “exactly as momentous as they make it out to be” because it has virtually no fees. The card has no monthly maintenance fees, and it’s free to load money on it through direct deposit, with cash at Wal-Mart, or via transfer from a checking account. (It costs $2 to use a debit card to load money on the Bluebird card, which seems like a strange thing to do in any case.) Bluebird doesn’t allow overdrafts, so there will be no surprise charges for spending more than the account balance. It costs $2 to withdraw cash from an ATM—and that fee is waived for in-network ATMs if the card is loaded via direct deposit. Strangely, the full Bluebird website won’t be up and running for another week, so it’s not clear if there will be fees for other features such as the peer-to-peer transfers that are possible with Bluebird’s mobile app....MORE
Walmart U.S. says confident about holidays
Retailer also plans to accelerate Neighborhood Market openings...MORE
General Electric is making all the right moves in their energy business, concentrating on a few different plays in natural gas.
We started touting Wal*Mart with a $65.xx handle, GE if it broke through $21.01.
Recent GE posts:
General Electric Approaching Psychologically Important $20.16 Level (GE)
Just funnin' ya, the psychologically important level is $21.01.General Electric: First Close Above $21 in 18 Months (GE)
One of the things we look for is relative strength on down days. In this case GE is up 9/10% vs. a 1% decline on the DJIA of which it is a component.
The point that interests us is the 52 week high at $21.00.
As I've mentioned, in the late '90's a very wealthy and very smart investor said to me:
"GE's phoney-baloney earnings smoothing is going to have to end, it's approaching the level of a joke, in addition to violating the '33 act".I sold that week, managed to avoid the entire Jeff Immelt tenure.
Now I might be interested. If the stock can clear this year's high the next spot it stopped was the April 2011 high of $21.65.
Warren Buffet has a higher target, $22.25.
That's the exercise price on Berkshire's warrant to purchase 134.8 million common shares.
The warrant expires in October 2013.
This little excursion into transnational mega-cap land was prompted by Morgan Stanley's estimate revision following Friday's earnings.
Recent WMT posts:
Further to WalMart's Plan to Be the Largest Health Care Provider in the U.S. (WMT)
Soros, Jim Simons' RenTech Buy Walmart (WMT)
Why Walmart, Target, and other big retailers are teaming up on mobile payments (TGT; WMT)
Earnings: Walmart Beats, Raises; Stock Drops on Light Revs, International (WMT)
"Wal-Mart Like Gold as Investors Seek Safety From Slowing Growth" (WMT)
"Wal-Mart Shares at All-Time Highs: Will the Rally Continue?" (WMT)
The big dog of retail didn't hit a new high today but we figure it will continue to do so.
FOR THE NEXT DECADE.*
*Previously:"Wal-Mart Surges as Economy Sputters" (WMT)
Too Funny: WalMart Upgraded by Deutsche Bank (WMT)
Wal*Mart Approaching All-time High (WMT)
The Wal*Mart Breakout Appears to Be For Real (WMT)
Anyone Who Has EVER Bought Wal*Mart is Profitable (WMT)
Breakout! "Wal-Mart Shares Jump As Broad Market Struggles" (WMT)
Say What You Will About Wal*Mart (WMT)
Watch Out Amazon: "Facebook, Wal-Mart chiefs meet to "deepen" relationship" (FB; WMT; AMZN)
...I've mentioned that the 12 1/2 year base that WMT stock built before breaking above the Dec. 31, 1999 all-time closing high ($70.25) implied something on the order of a ten-fold up-move over the next decade.
I've also mentioned that I have no clue what kind of corporate developments could justify a $2.5 trillion market cap, although I guessed selling produce in the stores wouldn't be enough.
This may be part of the answer....
Here at Boring Advisors we believe...Sometimes boring is okay.
We have pretty much one stock we've been touting to the public and it is boring.
$74.91 up 39 cents.