Importing Deflation

The Story

A week ago I intended to write a rant about the poor customer service I experienced at a particular home improvement superstore. We all know the names of the two nationwide behemoths, and these two (in keeping with the “law of two”) have successfully squeezed out their competitors……think Builders Square, Scotties, etc. As an aside, have you ever noticed how there typically seems to be just enough room in a given market for two competitors. Think Coke and Pepsi, Walmart and Target, or UPS and FedEx. Remember what happened when DHL tried to squeeze in?Beach Bear Continue reading

My Valuation of Fastenal (FAST)

Last week I wrote a post on the Income Surfer blog announcing that I had initiated an investment in Fastenal (FAST). I have been following Fastenal as a company since it opened its first store in my part of Florida. I’ve been following the stock price for about three years, but it always seemed too expensive. I will discuss valuation in a few minutes, but first let’s talk about the company.

Typically, purchases for my portfolios fall into one of two categories. Either they are “cigar butt stocks” (marginal businesses that are selling for less than their liquidation value or working capital), or they are powerful global brands such as our holdings in Coca-Cola (KO) or Johnson & Johnson (JNJ) which I like to hold in perpetuity. Fastenal represents a third category, growth at a reasonable price. Fastenal does not have a large defensive moat or an insurmountable competitive advantage. It is however a very well-run company which continues to grow the top and bottom line (as well as the quarterly dividend) year after year.

Read my complete thoughts on Fastenal as well as its valuation on Seeking Alpha

Dividends, a Purchase, and Thoughts on Oil

Well it’s a beautiful Saturday morning. Down here in Florida we’re enjoying the last gasps of winter. I’ll be taking the Little Man for a hike later today. We’ve got to give Mama a break, as she entertains him 90% of the time. My work week was uneventful……just a lot of meetings and trying to do the right thing to help our current residents. Ah, the life of a bureaucrat…….

Fortunately, this week the global markets gave us a little more excitement. The ECB laid out more of the plans for their quantitative easing, which is set to begin next week. A few more central banks cut interest rates, including China…..who also lowered their growth target to 7%. The dollar strengthened against most major currencies and the price of oil fell. As a result, US stocks and bonds both declined.  Continue reading