Say No To Trading
Public Markets Investor, Opportunistic Buying & Cost-Basis Management
Procter & Gamble is highly likely to keep lagging the S&P 500 over the next 10 to 20 years, as it has this century. Store brands like Costco's Kirkland and Amazon's are no longer seen as inferior, which has changed its story, and few of its brands are must-haves besides Gillette. Elevated petroleum-based input costs for plastics and energy cast doubt on its safety-stock status. At $139, EV/EBIT is about 16 and forward P/E just under 20, so it suits only those wanting a bond proxy. x.com
Costco stock cannot be expected to make major gains soon at 40x earnings with only low double-digit growth. The company keeps executing well, yet the stock has been flat over the last two years. x.com
Costco is a wonderful execution story whose business only gets better through consumer pain. Its Kirkland brand is more valuable than 90% of consumer brands today. The stock has been too expensive this cycle, and not owning it in size was a mistake; it is worth owning, though the right entry level is unclear. Sysco's moves illustrate the deeper transformation underway. x.com
Procter & Gamble is attractive at about 21.5x earnings. It is not a bargain, but it offers a modest margin of safety with growth picking up in 2027 and 2028, supporting a projected 12-month return of 20%. x.com
Costco's premium multiple looks unsustainable, at 40 times next-twelve-month earnings with EPS growing only about 10%. Stocks with PEG ratios like that are not worth owning, as multiple cuts at former compounders such as FICO and Intuitive Surgical showed. x.com x.com
Costco and Walmart's valuations have diverged from most US food and beverage stocks. Most of the group trades near 20-year valuation lows, while these two have entered a mini-bubble. x.com
Procter & Gamble's steadily rising dividend shows why boring pays through downturns. It raised its dividend for the 70th straight year in April; the annual payment rose 5.7 times from $0.76 per share in 2001 to $4.36 today, about 7.2% a year through the dot-com crash, 2008, Covid and 2022. It returned $3.9 billion to shareholders in one quarter, while semiconductors are 27% below their high. x.com
Costco is hard to justify at more than 40 times forward earnings while earnings grow only in the low teens. It behaves more like a sticky, mature subscription business than a traditional retailer, but that does not support the multiple. x.com
The S&P 500's elevated P/E masks concentration in just a few stocks, making index exposure less appealing than selective stock picking for risk and reward. Its P/E is well above the ten-year median; digging into individual constituents looks more sensible than buying all 500. x.com
Consumer staples such as Costco, Walmart, Procter & Gamble, Kroger, General Mills, Coca-Cola and PepsiCo are among the names to study if hantavirus fear dominates the next 60-90 days, whether or not a lockdown happens. Markets react to perception before confirmed reality, and fear alone shifts attention, behavior and capital flows. A real pandemic is not needed; the fear narrative only has to persist long enough for capital and behavior to start shifting. x.com
Costco's slow growth in a finite market does not justify 30x earnings. It is a good model, but new members joining to buy in bulk to save money is not the strength bulls think it is. x.com
