Subject: Re: OT: Mungofitch - Any observations on DG results_QM
Dollar General was heavily promoted on this forum by popular posters. Some of us openly and strongly disagreed with the idea.

Just the facts.


Yes, I think you may have already mentioned that. And it looks like you may have been right, so good for you.

From a broader perspective, these kinds of turnarounds are not something Buffett has typically had much confidence in. There are a couple of exceptions I can think of, like American Express, or a textile company I can't remember the name of. But in general, he has tried to buy solid businesses with good long term fundamentals and then just let them do their thing. DG (so far, at least) is an example that turnaround candidates don't always turn*.

Is this the bottom of the cycle, just as things start to turn, with an $87 stock price that will look like a bargain in a few years? Or is it the continuation of a long secular decline of dollar stores, with prices going lower and lower? I think you can make a good argument for either hypothesis. What do you think now?

*"Both our operating and investment experience cause us to
conclude that “turnarounds” seldom turn, and that the same
energies and talent are much better employed in a good business
purchased at a fair price than in a poor business purchased at a
bargain price."

https://www.berkshirehathaway....