Well OT: not a table pounder

Not a table pounder yet, but I think that Dollar General (DG), still falling, is now in the “reasonable buy” zone.
Current price $192.43 and falling rapidly.

Another great dollar store business like Dollar Tree, but more predictable.
They’re going out of fashion at the moment, as these businesses are wont to do from time to time.
Current price is only about 6% cheaper than usual.

But the EPS trend is up about inflation+15%/year in the last decade with negligible gearing, so even an average entry has been a pretty good thing.
The future business results could be quite a bit worse and it could still work out well.

Not a table pounding deal here, but I think it might be if the fall continues.
A remarkably predictable and easy to understand business.
I just opened a position.

Jim

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Does one of them own family dollar?

https://www.theguardian.com/us-news/2022/feb/19/fda-dead-rod…

Thank you for the idea, I’m still struggling with my idea of where the market could be in 3 months right now, so being conservative with new positions.

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If you can know where the market will be in the next 3 months,

then “god love you!”

Lol

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If you can know where the market will be in the next 3 months,

then “god love you!”

Lol

Point taken, the mood seems sour, you can beat and raise and end up going down, that has always been the case, but now everything is punished or maybe I watch too many tech stocks, surprised at GOOG in the 2500s for example. Since I work in Medical Devices I follow a bunch of stocks there and they’re working out about the same though. I would assume it is due to Ukraine / Russia situation, which has the opportunity to presumably take the EU economy with it, and have a strong impact on US.

I’m still bullish on real estate though, at least for this month. 20% YOY and +1% rate increase (so far) has me thinking we’re at the tail end of that as well.

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Thanks Jim. Agree it appears on sale with a good biz model. Also like the 38% ROE and PE of 18, vs. 19% and 24 for DLTR. Will add to the watch list. Please let us know if/ when you start pounding again!

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Since a long time I am wondering whether Saul’s board members+followers are not the largest market maker regarding SaaS stocks. Now Saul himself said so in one his last posts.

Jim: DG … I just opened a position.

Should DG today strongly rise we know that our own cult and it’s cult leader are a market heavyweight too, ha!

Combining two current board threads, Chris Bloomstran of Semper has a potted history and discussion of dollar stores in his letter. He’s held DG for a number of years and is also doubtless happy with current prices to top up his holding.

But perhaps of greater interest is this quote about DLTR, “We got very lucky to initiate a 2% position in the shares on September 27. Who would have known that two or three short days later would come the announcement of the breaking of the buck, and with it a surge in the share price from our cost of $87 to $140 at yearend?”

Maybe he was lurking on this board before making the DLTR plunge?!

In any event, his comments are worth reading … as is the rest of his letter but that might take a little longer to digest.

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I’m sorry this is not acceptable.

I pay you to find table pounding deals, not nice little businesses that are possibly slightly undervalued.

I’m going to have to re-evaluate our relationship here.

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Current price $192.43 and falling rapidly…

Now at $245.80, up 28% in 45 days.
Not so bad. The ITM calls I bought that day are up 81.5%.
I figured it looked like a good deployment of capital for a couple/few years, which still makes sense as it’s a great firm.
Earnings per share have risen at around 15%/year for over a decade, which is a nice sign.

But I’m starting to lighten up a bit already.
It makes me sad, but I do like cash. It gives me a good chance to pounce when the pouncing is good.
Even though I’d probably do better to keep holding and sit on my butt for the next decade.

Jim

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Even though I’d probably do better to keep holding and sit on my butt for the next decade.

What fun is that?

Current price $192.43 and falling rapidly…

Now at $245.80, up 28% in 45 days.

I was looking at this today as well; I am in @ $191.45 and might sell this off to raise some cash. I have been slowly adding to DIS and might redirect some of this there.

tecmo

PS:I sold some COST this week.

I have enough cash so I don’t have concerns to lighten. But if I didn’t? What Jim posts.

No matter what anyone says, buying/selling what you do understand at prices quite obvious is a working model. Cycles do come into play but far less in some types of businesses than others.

And no you do not have to own Snowflake, Datadog, or crypto to make it and make it with gusto. You don’t have to be go-go or have total admiration for Elon and his world domination glorious future.

The last thing I’ll mention this morning on my rant is that Warren Buffett is an outlier. He has done a simply fabulous job of making Berkshire sustainable, likely forfeiting ongoing results to make it so. But never-ever expect anyone to continue as successfully what he had done.

You were told. If I were young I’d not overweight Berkshire by too much. Outliers and simply that and you can’t go back home to Buffett in the future.

Yea, a tad too much caffeine!

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DG now at $187.25, about 3% cheaper than when I mentioned it in the kickoff post.
Up and back again. Not that rare for these firms…a wide range between yearly highs and lows is the norm.

As before, not a table pounder yet, but I think it likely offers good returns from here, for timeframes longer than the current slide.
Even if they have some cost issues this year.

Jim

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Jim, do you have a view on TUP?

Jim, do you have a view on TUP?

Nope : )

There was a time I noted that it seemed oddly cheap and was probably a good wager.
But in the final analysis, I don’t have a strong feeling about their future, one way or another.
Their business model seems a bit of an anachronism. Sometimes those last, sometimes not.

Jim

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