No. of Recommendations: 4
While you guys may snear at the comparison, some amount of thinking outside of stated eps and a takeoff of massive historical comparisons may be relevant. A comparison is the years of complaints old stupid dealraker made while holding his inheritance of Norfolk Southern.
Yep, the recent years of Hunter Harrison worship and model blead eps out to a degree that made an endless number of followers chanted upwards to the right of eps now and forevermore. Little attention was paid to the simple fact that absolutely nothing the company was doing was sustainable.
I complained, all others chanted in unison: "Hunter's model rules all." Cap ex plummeted; employees suffered in pay, benefits, and number of routes ended; maintenance ended while recently opened rail yards were closed; massive buybacks of stock at ever incrasing prices were admired by all comers.
And interestingly...wow...all reversed. I knew to sell, but given the stock has been in the family now for over 83 years (I got a whopping 1/27th of granny's stock)...but at $300 per share the stock was a joke for valuation and the business model literally sucked. Pefectly obvious to anyone with thinking skills above just following eps numbers and growth of that figure...a meaningless figure as to intrinsic value.
DG? Run way below sustainable levels of operation. Too many stores slung up in too competitive of locations with too few employees. That's the beginning, but now the entire overall economic world is evolving as to costs, interest rates, and inflation. Where I live the local store is the joke of the Facebook page; there are 20 stores within 27 miles of my home on the large lake here and all of them are within 7 miles of WalMarts.
Like Norfolk DG is on the re-set mode. Ain't it awful. Starting over from a new footprint is the reality. More staffing, more competition, less favorable economic world.
A tad of right brain enters the picture. Long ago I debated for months with manlobbi on BPY, his 7 X IV in 10 years was the online belief and it was held by all in unison. I considered BPY back then worth 1/2 the selling price so manlobbi's value was multiples of mine. Today? Brookfield Property is worth zero in my view. You say I'm bonkers? I believe it was Sam Zell who said, "You guys call me a billionaire yet there are many times in the past when I didn't know if I could put supper on the table."
Think clearly people. Using stats and doing massive, and I mean MASSSIVE, historical presentations is not something that often results in the alpha you desire. There are things in your face staring at you if you are willing to look past the nose.
The customer of the dollar store is often the very person most of us want to starve to death by cutting monthly benefits. The slow liquer cycle (those DUI's) driven to the store is the thing we try to run over with our SUV as we dominate the road. And we expect to bleed out some profits long term.
Years of short term bounces are coming. What's the long term story of DG? Really? The outcome isn't know for years and basically not a one here will be here when that comes.
But old stupid dealraker suggests any competitve edge DG has or had ain't gunna sustain...
But the short term pops, that generally what the short term online forums are all about. After all we basically turned the Berkshire board into day trading based on book value. Day trading Berkshire while being 50% cash and dissing the S and P is one hell of a long term investment strategy, but it has been that way now for all of my 27 years of being on the forums.
Life is great...if you can stand it.
