Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Dollar Tree

Grocery Wars

Is Dollar Tree Making Money?

What Dollar Tree is borrowing against is unclear because its cash and assets are limited. Dollar Tree’s assets were valued at just $15.827 billion on May 5, 2018. The company’s cash flow is limited and cash reserves are nonexistent.
Most likely, Dollar Tree is borrowing against its stock valuation. Dollar Tree shares were trading at $86.09 on July 16, 2018. That gave the company a Market Capitalization of $20.47 billion on the same day.
If my thesis is true, Dollar Tree would collapse if its stock lost any value. If Dollar Tree shares dropped below $60 or $50 the company might collapse because it would not be able to borrow money.

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Long Ideas

Auto Industry Developing Standards for Self-Driving Cars

One reason for this system is to make it easier to insure self-driving vehicles. Such standards will be vital if insurers are to develop policies for autonomous vehicles.

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Grocery WarsThe Death Spiral

Kroger Is Winning the Grocery Wars

Safeway and Albertsons currently have around 2,230 stores—almost as many as Kroger—but they had combined revenues of $60 billion in 2014, The San Francisco Chronicle reported. In contrast, Kroger, which operates 2,619 supermarkets, reported a TTM revenue of $108.47 billion on January 31, 2015. Kroger’s TTM revenue grew by 8.55% in 2015.

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Good Stocks

CVS Health Has a Lot to Prove

My prediction is that CVS’s revenue will continue to grow but none of its competitors will follow its lead and go tobacco free. Instead, CVS will be something of an anomaly, which will buy it a lot of good publicity and support from the healthcare industry.

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Market Insanity

Lilly Pulitzer Mess Shows What’s Wrong at Target

It is no coincidence that Amazon reported a TTM revenue growth rate of 15.08% on March 31, while Target and Walmart’s sales were staying flat. America’s middle class has changed its shopping habits dramatically in the past decade.

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Steps Government Could Take to Reduce Income Inequality

• Abolish the payroll or withholding taxes, which take a percentage of a person’s salary. These hit the working poor heavily, and they do not raise enough money to cover the costs of programs like Social Security and Medicare.

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My Thoughts

California’s Megadrought, Why There’s No Water Shortage and Why the Market Could Be the Solution

We now have a glut of oil, and there’s a very good chance we’ll have a glut of water in a few decades after we implement all the new technology.

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Walmart Feels the Heat

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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Market Commentary

Who Else Would Acquire Rite Aid?

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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