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Hello friends, I want to invest. The great investor Joel Grimlat says that retailer stocks are his favorite. When we talk about retailers, we mean retailers, for example, Walmart or Foot Locker. Greenplatz explains in a lecture at Columbia University Business School why there are often excellent investment opportunities among retailers.
And what is the best time to buy them? Crimlet says that he loves retailers because they constantly provide information and updates. In addition to sales on a quarterly basis, for example, on a monthly basis considering all stores or with the same number of stores compared to the previous year, some retailers like Alibaba and JD even provide updates on how sales have gone during specific occasions, such as the Global Shopping Festival on November 11th in China or during the New Year holidays.
Therefore, more information also means more volatility because Mister Market tries to use this information to trade, trying to anticipate, for example, how the next quarterly results will go. Greenplut says that more volatility means more opportunities for an investor, which is exactly the opposite of what the majority of our financial advisors tell us.
They tell us that we need to reduce volatility, you ca n't have solutions in your portfolio. add a sprinkling of bonds and raw materials, after all, many say it because they know that the majority, so to speak, of investors don't like volatility, so they hold on to their customers. What happens then with retailers?
That inevitably, sooner or later, they will miss expectations in a quarterly report or an anniversary, and it will happen even to excellent companies. And when this happens, the market punishes you mercilessly, regardless of whether it's the company's fault or the macroeconomic conditions, so you end up with a quality company because a quality company is quality for 30 years, not for one month yes and the next no because it misses market expectations with a 30-40% lower price.
and this is a great opportunity, as a recent example, comes to mind: Dollar General, which has a company history of fantastic sales growth for many years, profits in constant growth for many years, margins above the sector average, continuous buyback, dividends in constant growth, etc., but the price collapsed miserably after missing the expectations of the last quarterly.
But the problem is that then Grimlat says we find ourselves with these retailer companies that in a short time lose 30-40 percent, but it is difficult to pull the trigger after a minus 30-40 percent because many investors are afraid that the shares could fall even further and that is how they miss great opportunities.
So Grimlat says let's forget about how companies have been doing in recent months and let's not try to predict what will happen in the next few months. Instead, let's see how the company has performed in recent years if it is a solid and well-managed company. So to answer the question in the video, when to buy a Retail stock if we are sure that it is a quality company.
Then the best time is when they miss a quarterly report. When expectations for a season like Christmas are generally lacking. Black Friday Friday what it is and the price consequently collapses and this is what Grimmlet says. It is the advantage of the Retail investor over the fan managers because they are focused on how the sales will go on Black Friday which is important he says but not to the point of establishing whether or not it is still a quality company so we network investors must focus on the long-term fundamentals he says that even some Edge Fund managers in an attempt to play in the short term send their collaborators to the stores to look at the price tags and understand if they are offering too many discounts or to see if there are lines at the checkout and try to understand if they will beat the expectations of the next quarterly Crimlet He says that he would never be able to invest this way he would not sleep at night too stressed and he would risk being right only 50% of the time because in the end that is betting he prefers to have a time horizon longer than years and buy the shares when everyone hates them because And then there are opportunities to buy and therefore he says You have to be a contrarian but we know that it is not easy to resist the herd effect and buy when everyone else hates a stock so write in the comments if you are able to do the opposite they have in most cases a like on the video if you liked it and see you next time Ciao from Davide
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