Easy answer, isn’t it? It is considered one of the worst employers in the USA. It has a way to reduce wages to the minimum, not to mention benefits… So… No! We don’t like….
But, if we see it from a different point of view, if we have to decide where to go shopping, we make Wal-Mart the king of supermarkets. As consumer we take advantage or our fellow proletarian workers. We go there because there prices are low.
I have the feeling that Wall Mart could be a main foundation of what we may call a “Low cost society” just like JetBlue, just like Linux, just like open source world, just like Wikipedia, just like most online services on the Internet that cost less and less and often eventually become totally free.
A “Low cost Economy” is an economy in which companies must give good products at low, amazingly low cost to succeed. The world is becoming a “Low cost” planet, where consumer rule and get what the want at low, incredibly low cost.
If we do live in a low cost planet, only low cost airlines will survive… which is what is happening…
What about software? How long will Microsoft resist the lowcost long wave of Linux? Linux is such “low cost” that it is free… And not only Microsoft could be in danger, but virtually any software house could see an open source free software replace its products.
And VOIP? Sorry Telecoms…. Consumers decided they don’t want to pay for your phone calls anymore. They are flocking to Skype & friends to call for free.
And now that I think about it…t MP3s and file sharing are illegal ways by which bully consumer tell music majors: “We do want low cost music and we will have it”
I like so much this idea of lowcostsociety that I think I should open a new blog with this name. Actually I am checking on netsol.com
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Ops my friends… I am sorry but you will not read this post tonight! I know how smart you, greedy proletarian investors, are! The idea of a “low cost society” is so brilliant that you will take it away from me. I will post this blog tomorrow, after having registered the excellent domain “lowcostsociety.com “.
Sorry guys and dolls, now that you’re reading the domain is taken. Too bad… for you .
But well, if you like my theory (BE LOW COST OR DIE!) you can do like I wrote yesterday. You can buy stock of an excellent low cost airline like I will next week or, if you prefer, you can get a few Wal-Mart Stores Inc. (WMT) in your portfolio. They have an honest P/E tag of 17.06, which will go down to 13.70 if forecasts will become true. A Dividend Yield of 1.30% is not the most generous you can get on The Street, but that too can get better if earnings go up as forecasted (by whom it is hard to say).
In “low cost society” China wins because it produces low cost, but USA Internet wins because its technology, design and critical mass size can allow it to give low cost, or no cost services.
In a low cost society Apple would loose. Microsoft Oracle and company would not survive very long in such low cost society either. There are some areas of business that enjoy huge profits and crazy high prices where low cost society has not hit yet.
Oil will not be low cost any soon. You can’t compete there if you don’t have a whell in your backyard!
Health care can’t either. Most of the health care system is based on decisions by two guys who usually don’t pay the money: the doctor and the patient. Since there is usually someone (government or insurance) who will pay for them, it is unlikely they will look for lowcost products. Military equipment will not be low cost. The government is not so bully about that.
How did this low cost era begin (ops one more domain to secure!)?
I think it was the Internet bubble who poured the money of investors into services which where awarded for free to consumers. We the people, the proletarians got used to get it all for free, now we want more. More for free.
If we really have to pay, please make it low cost!
Proletarians of all the world, look for lowcost companies, check their growth, look at their earnings, and don’t forget to make sure they don’t have much debt. Did you? Well now you can bet on it your money gained with your hard work.
Have a nice day!
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