Trading Strategies (Backtested)

Now I admit, I've missed badly with most retail stocks, but WFM is looking cheap.
I like the brand, my wife loves to go there even if it's outrageously overpriced.
She says she feels good.
Also points out the type of people that go there so she feels good mixing in with that certain demographic.

I've been looking sort of into Whole Foods because its pushed, down my throat at the Motley Fool. For comparison, they are also long on Amazon, Tesla, Chipotle, Facebook, Twitter, and 3D systems. Not exactly value stocks. So when I see them pushing Whole Foods, I"m like "ehhhh."

But anywhoo, per my reasoning, more and more people are putting a premium on quality foods, which i think its a good thing. Most millenials are willing to spend an extra buck or two on organic food, since they see their health and diet as moreso of an investment. And Whole Foods fits that niche like WHOA.

However, I'm just afraid that Whole Foods doesn't really have that much of a moat. What's stopping Wal-Mart or the main chain stores from having organic food?

Then you also have competitors like Sprouts and Trader Joes, and any local mom and pop shops around town. The big chain around here in Portland, Oregon and its pretty much the Oregon version of Whole Foods.

All that being said, everything has a price and due to the drubbing WFM has been taking lately, its looking cheaper. Is trading at around 25 times earnings, which isn't bad for a growing company.

I would like to watch it for a few quarters and see how its margins are affected once the competition starts piling on. Wal Mart has already fired the first salvo by securing the Wild Oats brand and using their economy of scale to lock down a ridiculously low price for their products.

''For comparison, they are also long on Amazon, Tesla, Chipotle, Facebook, Twitter, and 3D systems''

Blimey , i nearly spat my drink all over my laptop when i read that. What an amazing collection of drastically overvalued stocks. A shorters wet dream ?
And here's another ;

Well the Fool are very growth orientated. Don't expect any value picks from them.

But to their credit, they got into most of those positions at very early stages.


Anyways getting back to WFM, it's not much of a moat other than brand awareness and "status".


I'm not worried about Walmart or Costco.
Walmart is a completely different target market and WFM shoppers don't go to Walmart to begin with.
I don't like going to Walmart because I know that a lot of stuff they sell is of the lowest quality.

My wife wanted to get her products into retail chains and Walmart was a company we studied and got some advice on. Turns out they will drive margins on suppliers like crazy. So in the end, the suppliers have to come up with a low cost alternative to the same product they sell somewhere else.
It's not the same product. Inferior quality.


May not apply to all food items, but there are also different levels of organic and quality.


I like that example given by peridot between starbucks and WFM. Starbucks coffee just plain sucks. But people go back again and again because it's starbucks and they know what to expect.
There is a very strong base of hardcore WFM shoppers. Lots of younger affluent millennials and older affluent folks.