Perhaps then you should be able to articulate how exactly the mid-term election is going to impact the economy.
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Fastenal - was wondering about them a couple of months ago when their logo was seen regularly on the ice in the Stanley Cup playoffs. Wasn’t there some discussion about them in a topic a while back. I don’t really recall the details but suspect it was along the lines of good company richly priced.
Confession - I haven’t studied them myself. I guess I was too wrapped up in the hockey!
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Fastenal is a rarely-on-sale company. I like Fastenal because they have a really simple business and I’ve had experience with multiple Fastenal products / offerings / business segments due to my line of work.
Things I like about Fastenal:
- Pretty easy to understand business in a super boring field - sourcing and supplying commodity items like screws, nuts, fasteners, anchors, tools, and so on plus sourcing some unique items for specific customers through their manufacturing partners.
- Low debt. It doesn’t take a whole lot to run the company and they generally fund their own growth.
- Consistently high return on equity, typically in the upper 20s to low 30s.
- Large, established, sales points and distribution network. Hard to overcome.
- Earnings growth is decent-ish, typically mid 7%s to upper 12%s.
- CEO is making insider buys around the current price. Not a lot, certainly not a lot compared to his current holdings, but he’s purchasing.
Fastenal goes through long periods of nearly no stock price gains. Much like Berkshire. Buying when the PE is in the low 20s has generally turned out pretty well within a few years. At the current earnings run rate, buying in the lower $40s to mid/upper $30s would appear to be a decent buy historically.
All that said, Fastenal earnings will probably get utterly crushed in a recession. Peak to trough for Fastenal in 2009 was about -50%.
I’ve often wondered why Berkshire hasn’t purchased all of Fastenal. Seems to fit the bill of profitable, easy to understand, not a lot of capital needs, etc.
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I thought so. All you could offer is, I am a smart guy trust me… you really expressed your political views and have nothing really to offer.
Fastnel looks like a great company. Very steady earner with steady growth in revs and eps. Nice stable and growing dividend which is well covered. Very high ROE, little debt. What’s not to like? The price. While it is off its all time highs by nearly 30%, it is still trading at 25x ttm eps. As you note, it traded around 18-20x EPS between 2018-2020. Given the current market turmoil, why wouldn’t you wait for a better entry point?
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Totally agree. I have a soft spot in my heart for simple companies making simple things.
Graco and Ecolab fall into similar categories. Ecolab is a bit goofier considering it’s more of an annuity company posing as a soap and services company. They seem to have engaged in some financial engineering to grow earnings while not growing revenue but they still make simple things for simple industries.
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Here is yet another example of self-proclaimed expert being wrong. Again, it reinforces my thinking many academic research outside of “core science” is highly suspect and of very little to no value. US higher education encourages lot of so called “research” that serve very little value. Most are just to pamper “ego”.
“it’s economy the stupid”… James Carville
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Surprise! The thread “Share the pain” is still alive: Share the pain 😲 - #69 by WEBspired, Chinese stocks are no investable!! What has changed this past week?
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How do you feel about DIS now? Considering it myself.
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‘rationalwalk’ used to be a valued poster on the BRK board, but some time ago he (she?) quit and started their own website https://rationalwalk.com
I have no affiliation with the site.
I subscribe to their free weekly newsletter, ‘rational reflections’, and I greatly enjoy the commentary, even more so now that Jim (mungofitch) no longer posts on the BRK board. I just thought other people might like to know about it.
They also have a paid “Business Profiles” service, which they explain isn’t a stock tip service, but consist of in-depth profiles of companies that they find interesting. These interesting companies might, or might not, be worth an investment at some indeterminate point in time, but that decision is left up to you after reading their insightful analysis.
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I think Disney+ is seriously underwhelming. Compared to Netflix, Prime, it sucks big time. But they keep adding users; At what point users will get tired of Disney+? I think they are seriously canabalizing their TV users (Kids) with Disney+ and will hit maturity much earlier and will see bigger churn. Of course, that is my view, and there is no data (in their results) that is supporting that view.
Ive just subscribed to Disney+ the Marvel franchise is excellent I’m hooked! Horses for courses 
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We have Verizon cell service. They recently upgraded us to unlimited data with Disney+ and Hulu, ESPN and actually lowered our cost. I wonder how many of us Verizon users contributed to the Disney+ increase in subscribers.
Not amazed by it, but am not a movie person. After a few days of binging on the superhero movies, DH rather lost interest as well. Hulu is a different story. Very well organized, keeping track of what’s next in your viewing of a series and letting you know when new episodes come up. Can’t be said for all streaming platforms. We also gave up our Amazon Prime subscription, since we were not using the streaming or radio anymore and you still get free shipping when ordering anything over $29, IIRC. Left with the most recent increase in Prime.
IP
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I like James Carville, but there’s not been an election in at least the past 50 years in which this observation was less apt, and happily so. Looking forward, the threat of a GOP-led threat to refuse to raise the debt ceiling, thereby risking default, appears to be much diminished but (as of today) not entirely off the table.
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The market moved up sharply because inflation is 7.7% and down from 8.2%. Not because of elections. When politics defines your life, you want to believe the world revolves around your view. But not. Your political views are not shaping the economy. Get it.
The drama of debt-ceiling is what it is. Don’t blame only GOP, democrats when they had opportunity they also enacted the drama. Let us be clear, in this two party system, both play games against the public, and not against each other. Somehow, the aspirations of 330 million can be captured in a binary choice is ridiculous. Both parties made sure, there is no scope for others. That’s a completely different conversation, one I am least interested in.
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For the record, that’s simply not true. The debt-ceiling vote was a routine matter until Gingrich weaponized it. It’s been GOP exclusively since then who’ve used that threat. How Republicans weaponized the debt ceiling
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hmmm you may want to get your facts double checked. PolitiFact | Fact-checking Biden’s claim that raising debt limit is usually bipartisan
Those instances by Dems were purely symbolic, of no practical significance. The votes to raise the debt ceiling were in hand and everyone knew it. In contrast, the recent GOP threats–including the one that was/is a concern currently–pertain to when the opposition could credibly threaten to shut down the federal gov’t and even trigger default.
Look: elections matter. They shape key fiscal policy and international relations decisions. That’s esp. true when the parties are as polarized as they are currently. Those decisions in turn have undeniable impact upon markets. I would have thought these facts would be utterly uncontroversial. But I guess some folks will try to make an argument out of anything.
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Those instances by Dems were purely symbolic Keep believing what you want to believe, after all it is your money.
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Lets go a step further…the market is not the economy. However, the market is governed by actions of investors and not always rational. Because of that, the markets can be irrationally influenced by irrational investors.
I suspect the market was up in part because of elections, and when the Dems retained the Senate majority on Saturday, told DH that I expected the market to go down on Monday. As far as the single datum point showing a reduction in inflation, IMO the Fed will see that as too little to make any changes in continuing to increase rates, possibly sticking with the 0.75 bps increases given the rocket up of the market post CPI last week. They will feel a need to temper what they see as irrational exuberance in the market.
FWIW,
IP
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