I would like to know what you think of the rising wages in China in relation to this business and whether, in your opinion, this could be a cause for the dollar stores (and, indeed, to some extent WMT) to command lower valuations today. I don't see any meaningful risk in higher wages, as there will always be lotsof things that are reasonably cheap and suitable for dollar store inventory.If all the world's cheapest things get more expensive, there will stillbe something that is the cheapest, and that's what they'll sell.To me the bigger risk is that these firms are basically importers: allrevenue is in USD and the great majority of COGS is in other currencies.Those other currencies might be pegged to the dollar, but not forever.A fall in the US dollar is a big risk for them. Same for Walmart.Admittedly this won't be great for the purchasing power of anybody in theUS so a mitigating factor is that even more people will be forcedto shop at Walmart and dollar stores.If one is worried about the risk of a crash in the dollar, betterto own Caterpillar than Walmart.Jim
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