I buy a company named Walmart. I'm sure we all know Walmart. Very high quality company. Not the most exciting company to invest in, but it's a very solid business model because I start understanding.
I look at the income statements, the balance sheets. I start understanding the business model. I understand the Buffett principles of value investing. I buy Walmart
Over the past decade, Walmart has brilliantly turned its geographic location from a weakness into a competitive advantage against Amazon. Do you remember in 2016, when investors were worried about Walmart potentially going bankrupt and being overtaken by Amazon and its e-commerce business?
Walmart, I think Walmart was 50 times as much. I know that Cusco is at high levels. I think Walmart is trading at 40 to 50 times earnings. This is madness. It's difficult to build an investment case around this.
So, let's go over an example with Walmart. Walmart is a core position in my personal portfolio and something that I oftent times talk about in my private coaching community on Discord.
So Walmart, let's talk about Walmart cash secured put. Let's say that the share price is 105. You set aside $10,000. Expiration date is 30 days and you collect a very small amount of money.
Walmart has something that's called low implied volatility. When a stock has lower implied volatility, the premium is also going to be much less.
I'm sure you all know Walmart, probably one of the most And so, I'm sure everyone knows uh Walmart, one of the most like formidable American business.
Sam Walton biography Made in America is one of my favorite business book. I'm sure you've all read it. Um And Walmart has been an amazing business in America, you know, everyday low price.
Um I think that resonates obviously with all the consumers. Uh they've done incredibly incredibly well building, you know, like density across the US, sharing that scale with um their customers and offering obviously um you know, cheap item that resonates with uh with customers. And it's been an amazing investment over time.
And the first stock is Walmart. This is a very interesting case study because historically speaking, Walmart's done very well over the last decade. It's outperformed the S&P 500 by a pretty large margin.
However, in the last year now has underperformed up about 5% and year-to date actually down by 2% while the S&P 500 is up double digits. Now, it's climbed just a little bit over the last couple of days, but it is on the lower end of its 52- week range.
Think Target, Walmart, Amazon would be the first to feel the sugar high bump even though nothing about their underlying earnings changed.
So Walmart is adding Papa John's to its delivery lineup. Its third partnership after Subway and Duncan, and it's first with a chain not already inside of the Walmart stores. Orders run through Walmart's existing Spark Driver network, promising 30 minutes or less delivery, with 90% of Americans living within 10 miles of a Walmart.
The number that matters is 65% of restaurant orders already include other Walmart items, meaning the food delivery play is really a Trojan horse to grow basket size and app engagement directly encroaching on Door Dash and Uber's territories.
And here's Walmart was classically correlating with earnings all these years. got overvalued and even during this period of time if you look the company did outperform its earnings but that was a period of overvaluation then we've had this strong runup and now we've have this correction looking to happen so this would be a sale in my portfolio if I owned it now
