In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche
The risk Target is taking is not that great, and it is giving its customers a stronger incentive to buy its more profitable house brands. Target’s return policy is a shrewd move because the potential gains outweigh the risks.
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What is even stranger is you would have to sell almost four shares of Berkshire Hathaway’s Class B (NYSE: BRK.B)[3] stock to get enough money to buy one share of Google’s Class B stock (NASDAQ: GOOG). On March 10, 2015, one share of BRK.B was selling for $143.85, while one share of GOOG was selling for $559.44.[4]
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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A very dark horse contender for an eBay acquisition would be Berkshire Hathaway (NYSE: BERK.B). Uncle Warren is famously technology adverse, but eBay does meet some of his criteria: it’s a good company with a strong brand that’s well respected on Main Street but undervalued by the market. It also has a business model that generates a lot of float and cash—two of Buffett’s favorite things.
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The median home prices indicate something else that we could be seeing: real estate deflation.
Read MoreThat makes Amazon one of the five largest retailers in America, larger than Target (NYSE: TGT), which reported a TTM revenue of $73.7 billion on Oct. 31, 2014; Walgreens Boots Alliance (NASDAQ: WBA), which reported a TTM revenue of $77.62 billion on Nov. 30, 2014; and Home Depot (NYSE: HD), which reported a TTM revenue of $81.71 billion on Oct. 31, 2014.
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What is the correlation between online retail’s growth and grocers’ growing revenues? The answer is a rather simple one: the grocery store is the one large retail outlet that most people still have to visit on a regular basis.
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Traditional solutions to income inequality, such as minimum wage increases, unionization, tariffs, and confiscatory taxes, will become increasingly ineffective.
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A high-speed ground transportation system like Hyperloop could be enormously profitable if somebody actually built it. A customer for it would be United Parcel Service (NYSE: UPS), which reported a TTM revenue of $57.31 billion on Sept. 30, 2014, a $2.28 billion increase over September 2013, when it posted a TTM revenue of $55.03 billion.
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Many of today’s market rock stars, including Google (NASDAQ: GOOGLE), Amazon (NYSE: AMZN), (Netflix: NASDAQ: NFLX), Apple Inc. (NASDAQ: AAPL) and Costco Wholesale (NASDAQ: COST), are momentum stocks. The theory driving these stocks is that the new markets these companies create are capable of generating unlimited growth.
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