Thursday, November 06, 2008

A Barometer for the New Administration

Wal-Mart, not surprisingly, is doing well. Cautious shoppers are looking for bargains. Wal-Mart does well in moderately bad times.

Wal-Mart also does well in good times, as the less well off do better and shop more or move up from Family Dollar.

Meanwhile, the President-Elect and his Congressional Majority (a name for a rock band?) are on record as supporting card check, i.e. allowing unions to organize workplaces with an open petition of employees as opposed to a secret ballot.

If card check passes, Wal-Mart will be the first target for organized labor, and its biggest prize.

If a year from now Wal-Mart is not doing so well, it will mean one of two things: either the economy is so totally in the tank that no one is buying anything or Wal-Mart's workforce has been organized via card check. In the latter case, the economy will be headed to the tank.

We suggest monitoring Wal-Mart's stock price as a means of assessing the economy's prospects and the new administration's success. It closed today at $13.34, up $0.70 or 5.5%, on a day when the market as a whole took another cold bath.

1 comment:

Anonymous said...

the band is called PECM?