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No. of Recommendations: 10
Berkshire's buys (annual, not quarterly)

2005, 19.9 million shares at average price $47.33, total cost 944m
...
2009, 19 million shares at average price $49.81, total cost to date $1.89bn
...
2012, 15.8 million shares at average price $59.80, total cost to date $2.84bn
2013, 2.0 million shares at average price $70.11, total cost to date $2.98bn
2014, 10.9 million shares at average price $75.40, total cost to date $3.80bn
Current price is $80.76.

This shows a fair bit of confidence, and ongoing confidence.

Are most others coat-tailing on this one?
Any insightful comments?



Funny you should mention it. I just increased my WMT position today to #2, bumping BRK to #3. I think you characterized it as an investment 'hiding in plain sight' a few years ago at $50, and while it has not exactly been a home run for me with a 60% price return plus about 15% in dividends, I sleep well at night with it, since I think it is one of my safest investments. I take comfort in the fact that it barely dipped during the Great Recession. and is unlikely to next time, either. It has 56% of US sales coming from groceries, which are not likely to go out of fashion.

I particularly love the way they ratchet up the buyback program when their share price is low, spending $6-7B most years, but $15B in 2010 when prices dipped below $50, and only $1B last year with prices in the mid-$70s.

They continue to invest wisely, with about 20% ROE year in, year out, and they are taking market share in US online deliveries, with 30% growth last year compared to Amazon's 20% growth. OK, it's true, Walmart started from a small base, going from $10B to $13B, while Amazon went from $71B to $85B, but I think Amazon's model might be in trouble, as their delivery costs continue to spiral out of control. Walmart actually has some competitive advantages over their pure online competitors (or, more or less, competitor) based on their existing bricks and mortar infrastructure. I didn't really believe they could ever catch up to Amazon as a place where online shoppers might think of going, but there are some early signs that this might work.

OK, this is a little off-topic from your original question, but since I can't provide a lot of insightful comments you requested, how's this for a question, to which others may provide insight:

How well can Walmart leverage its existing infrastructure to serve online commerce?

Here's what one guy thinks, from a recent Fortune article:

While these are not easy to replicate, if at all, an even more important issue is whether Wal-Mart’s distribution network could rival Amazon’s?

Amazon currently has 125 active warehouses that serve end-customers around the world while Wal-Mart only has a handful. This may seem surprising for the world’s largest retailer but keep in mind that a distribution center for resupplying stores with inventory is a completely different animal than a warehouse for shipping directly to end customers. Recently, Wal-Mart has announced plans to build a 1.2 million square-foot warehouse in Indiana dedicated to e-commerce. Wal-Mart currently uses its 4,200 existing retail stores as a nexus for shipping to end customers. Approximately 20% of online orders are now shipped from a store. This strategy is likely much less efficient and could prove quite costly relative to Amazon warehouse that have been optimized solely for online orders.



I'm sure there are disadvantages to a store-based model, but it seems to me there are a lot of advantages as well. The big advantage would be that stores can skip the costly last-mile delivery and get many customers to do the pick-up themselves, a strategy which is common in Europe apparently. They can also offer a variety of delivery options: more costly, fast delivery from the central Walmart warehouse, cheaper delivery in a few more days via the local Walmart store, or free u-pick from the local Walmart store. Retail and delivery experts please opine.

Anyways, with the share price down from the recent $90 level to sub-$81 where I bought 20% more today, I think this one may be hiding in plain sight again.

Regards, DTB
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