Today WalMart (WMT) reported its earnings, beat by a penny and confused everyone with its convoluted forex laced guidance for 4q. I have been quite public expressing my opinion that WMT would be a victim of Obama policies. In particular I am worried about potential anti-trust efforts to break up WMT as well and the impact of the employee free choice act.
However, Andrew Ross Sorkin had a very interesting article in Tuesday’s New York Times. In the article he discusses a conversation that he had with David Boies, a prominent attorney who was hired by Washington to “bust up” Microsoft (MSFT) in the 1990s. Boies is of the opinion that Obama would not take an active antitrust stance in his first two years of office.
I agree. I think that given the state of the economy that Obama is going to be far less socialist in his policies in the early part of his administration. As a result, I am going to back off on my concerns for WMT in the near future. Though WMT will get a reprieve on the antitrust front I expect that to be short lived. The bigger issue on the labor front could be a more immediate problem for WMT.
Benefitting WMT in the short run will be the continued trading down by consumers of all income levels. Thus, WMT could be a good investment for the first two years of Obama’s presidency but after such time the festering issues I described could begin to surface and turn WMT into a great short.
Posted By Scott Rothbort at November 13, 2008