Value Microcaps Motherboard

[lentinman]

Wal-Mart:

Joe Kernan just said that $70 oil and Wal-Mart don't get along. That sounds good on the surface, but IMO it overlooks a very critical issue. Wal-Mart is the store of last resort. (Of course in my case it is the store of FIRST resort. In fact, it is my own personal RESORT, but I digress.)

People who traditionally shop at Wal-Mart are STILL going to shop there. They have no choice! Wal-Mart doesn't sell luxuries. They sell "necessities". Yes, the average WMT shopper might cut back. But, it isn't Wal-Mart that should be the issue of concern with $70 oil, it is those retailers on the food chain ABOVE Wal-Mart. $70 oil (along with the numerous other economic problems that will be go along with it) will cause millions and millions of people who are "above" shopping at Wal-Mart to change their shopping habits and become NEW Wal-Mart shoppers. What WMT loses on the low end due to cut-backs, they will gain by people needing to buy cheaper.

The retailers that tailor to the upper middle class are the ones that are going to be hurt the worst IMO. That doesn't mean I think WMT is a good buy, it is just that I don't think it is as bad a buy as most others - and I DO think that retailers "above" it are FARRRR worse buys than most other people think.

Len