In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche
All this being said, Obamacare is a very poorly designed and highly ineffective program that will fail. From what I have seen of it, it is clear that those who designed Obamacare have no real understanding of the realities of American business, economics, healthcare, and insurance.
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My take is that Kroger is most likely to make a big acquisition outside the grocery business unless it can get a major grocer that would expand its geographic reach. The most logical acquisition for Kroger outside the grocery business would be Rite Aid. Even if it does not make an acquisition, Kroger is still a great value investment because of its profits.
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Walmart is no longer on the cutting edge of retail; it cannot even compete with bottom-feeding dollar stores. The Behemoth from Bentonville still makes a lot of money; it just cannot attract any new customers. What is going on here?
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Yes it is a bit of a dark horse, but Rite Aid does meet some of Warren Buffett’s value criteria: it is a good company that has been going through a rough patch yet still has the potential to generate a lot of cash. It also has an easy-to-understand business model in a decidedly unglamorous industry—selling shaving cream and prescriptions. Rite Aid also meets another one of Uncle Warren’s classic criteria: it is a company that an idiot could run if necessary.
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The major reason Jack Ma will stay away from mass retail in the U.S. is that the cost of entering in the market could simply be too high. The revenue from a large-scale U.S. retail operation might not justify the cost of setting up such a venture.
Read MoreCostco’s same sales increased by 7% in January, and shopper traffic increased by 5.8% indicating that the retail recovery has definitely reached its warehouse. Meanwhile Sam’s Club’s sales without fuel grew by just 1.6% in the 13 weeks that ended on Jan. 30, 2015, and .5% during the year that ended on Jan. 30, 2015.
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Most investors seem to have missed a massive disruption in the world of American retail. Kroger (NYSE: KR), the venerable grocer, has successfully transformed itself into a highly effective and aggressive bulk discounter with capabilities rivaling those of Costco Wholesale (NASDAQ: COST).
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Costco, on the other hand, can use the float from its memberships for almost anything it wants to. That’s good news for investors because Costco generated $768 million in membership fee revenue in the fourth quarter of 2014, according to The Wall Street Journal. Costco’s float is growing too – its membership fee revenue grew by 7% during the fourth quarter.
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One reason why the poor stay poor is that they often lack the opportunities to save money that middle and even working class Americans enjoy. By save I don’t mean put money in a bank account, which is obviously important, but simply pay less to live.
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The effect of falling oil prices should have us wondering about other commodities and energy in general. As modern technology makes increases the supply of commodities, prices will drop making industries and enterprises unprofitable with devastating effects on employment and the greater economy.
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