Tesco - Asking For Comments
The reveal of work long investments inwards my portfolio doubled overnight - from 1 to two. (We convey to a greater extent than or less pocket-size work longs too to a greater extent than or less large longs amongst to a greater extent than nestling problems - too to a greater extent than or less work shorts but solely 2 largish positions that are doing poorly.)
The treacherous 2 are the (much discussed) Bank of America long too the (less discussed) Tesco. Bank of America is a banking venture - thence highly levered - too thence total disasters can't always hold upwardly discounted. But Tesco is a grocer amongst a seemingly impregnable seat inwards the Great Britain too to a greater extent than or less positions elsewhere that may or may non hold upwardly fine. It is difficult to run across how yous compete amongst Tesco inwards its nub work concern - too hence it is pretty difficult to run across how they operate inwards existent trouble. They convey debt (driven past times the demands of investors during the final cycle to "sweat the residuum sheet" but the debt should non hold upwardly problematic too the repayments are fairly rapid.)
I idea Tesco was my "safe" long. The relatively security made the seat bigger!
Oops.
On Tesco, I was sceptical of their expansion into the United States. Grocers (indeed retailers inwards general) convey a pitiable tape of crossing borders - in that location are enough of cultural differences.
More to the betoken it is fairly slow to opened upwardly up inwards contest inwards the US - in that location are vacant big-boxes everywhere too presently to hold upwardly to a greater extent than - but it is really difficult to opened upwardly up inwards contest inwards the built-up cities of the UK. The Great Britain is thus naturally a skillful work concern (hard to compete with) too the US less so. [Contra: I gauge that is why they opened upwardly inwards the US - because they tin larn sites...]
But when I revealed the seat 1 of my regular correspondents (and manifestly smarter than me) admonished me. He idea the American positions would hold upwardly fine but the Great Britain was going to hold upwardly problematic - he idea margin declines could hold upwardly nasty. And that is how it looks correct instantly - the US has really skillful sales increment - the Great Britain speedily falling sales increment (a really bad 2nd derivative) too declining margins to boot.
Margins may hold upwardly the destination of this storey - but perchance in that location is something else. After all the competing retailers did good over Christmas - the problems await Tesco specific.
So hither is a asking for comments. When I was final inwards the Great Britain (both recent trips) I did non pace out of the international metropolis of London. Oxford Street is visibly doing quite well. But the Great Britain is not. My friends amongst businesses over the Great Britain depict the metropolis every bit a cocoon in which yous tin comfortably store too run across no problems amongst the world. Go to work concern parks in Edinburgh 1 time built for grand fiscal institutions too it looks different.
So hither is a asking - too it is a asking for my (relatively few) Great Britain readers exterior London. What is going on at Tesco too Sainsbury inwards places similar Leeds or whatever other major regional metropolis inwards the UK? Is in that location a argue why the problems appear Tesco specific? Is Tesco deliberately going downward marketplace (they appear to hold upwardly inwards recent promotional videos).
My hopeful asking to readers is for person to bear an "apple freshness test" inwards a regional city. For this exam yous purchase an apple tree from each of the local grocers on the same twenty-four hours too larn out them on the shelf to run across the gild inwards which they rot to the betoken yous would non swallow them. Twelve days is by too large pretty skillful - it way the render chain is fast too efficient. Eight days less so. The grocer that loses the apple tree freshness exam eventually loses the reputation for fresh nutrient too volition (inevitably) lose margins too profits. This is something that happens imperceptibly - but women (and they are mostly women inwards this case) are really skillful subjective judges of where to shop.
The "apple freshness test" is the nub here. The companionship says that at the "heart" of what they need to produce is fresh foods. Fresh foods is solely partly most what happens inwards the store. To hold upwardly fresh they need to bargain amongst the chain.
Hoping for assistance from my readers.
John
It is a pocket-size (meaning worthless) consolation that the 2 stocks on which I am suffering are the ones Warren Buffett has been buying. I am losing coin inwards skillful companionship - but they are losses but the same. (Unlike him though I convey to a greater extent than or less winning short-sales...)
The treacherous 2 are the (much discussed) Bank of America long too the (less discussed) Tesco. Bank of America is a banking venture - thence highly levered - too thence total disasters can't always hold upwardly discounted. But Tesco is a grocer amongst a seemingly impregnable seat inwards the Great Britain too to a greater extent than or less positions elsewhere that may or may non hold upwardly fine. It is difficult to run across how yous compete amongst Tesco inwards its nub work concern - too hence it is pretty difficult to run across how they operate inwards existent trouble. They convey debt (driven past times the demands of investors during the final cycle to "sweat the residuum sheet" but the debt should non hold upwardly problematic too the repayments are fairly rapid.)
I idea Tesco was my "safe" long. The relatively security made the seat bigger!
Oops.
On Tesco, I was sceptical of their expansion into the United States. Grocers (indeed retailers inwards general) convey a pitiable tape of crossing borders - in that location are enough of cultural differences.
More to the betoken it is fairly slow to opened upwardly up inwards contest inwards the US - in that location are vacant big-boxes everywhere too presently to hold upwardly to a greater extent than - but it is really difficult to opened upwardly up inwards contest inwards the built-up cities of the UK. The Great Britain is thus naturally a skillful work concern (hard to compete with) too the US less so. [Contra: I gauge that is why they opened upwardly inwards the US - because they tin larn sites...]
But when I revealed the seat 1 of my regular correspondents (and manifestly smarter than me) admonished me. He idea the American positions would hold upwardly fine but the Great Britain was going to hold upwardly problematic - he idea margin declines could hold upwardly nasty. And that is how it looks correct instantly - the US has really skillful sales increment - the Great Britain speedily falling sales increment (a really bad 2nd derivative) too declining margins to boot.
Margins may hold upwardly the destination of this storey - but perchance in that location is something else. After all the competing retailers did good over Christmas - the problems await Tesco specific.
So hither is a asking for comments. When I was final inwards the Great Britain (both recent trips) I did non pace out of the international metropolis of London. Oxford Street is visibly doing quite well. But the Great Britain is not. My friends amongst businesses over the Great Britain depict the metropolis every bit a cocoon in which yous tin comfortably store too run across no problems amongst the world. Go to work concern parks in Edinburgh 1 time built for grand fiscal institutions too it looks different.
So hither is a asking - too it is a asking for my (relatively few) Great Britain readers exterior London. What is going on at Tesco too Sainsbury inwards places similar Leeds or whatever other major regional metropolis inwards the UK? Is in that location a argue why the problems appear Tesco specific? Is Tesco deliberately going downward marketplace (they appear to hold upwardly inwards recent promotional videos).
My hopeful asking to readers is for person to bear an "apple freshness test" inwards a regional city. For this exam yous purchase an apple tree from each of the local grocers on the same twenty-four hours too larn out them on the shelf to run across the gild inwards which they rot to the betoken yous would non swallow them. Twelve days is by too large pretty skillful - it way the render chain is fast too efficient. Eight days less so. The grocer that loses the apple tree freshness exam eventually loses the reputation for fresh nutrient too volition (inevitably) lose margins too profits. This is something that happens imperceptibly - but women (and they are mostly women inwards this case) are really skillful subjective judges of where to shop.
The "apple freshness test" is the nub here. The companionship says that at the "heart" of what they need to produce is fresh foods. Fresh foods is solely partly most what happens inwards the store. To hold upwardly fresh they need to bargain amongst the chain.
Hoping for assistance from my readers.
John
It is a pocket-size (meaning worthless) consolation that the 2 stocks on which I am suffering are the ones Warren Buffett has been buying. I am losing coin inwards skillful companionship - but they are losses but the same. (Unlike him though I convey to a greater extent than or less winning short-sales...)
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