The Wal-Mart of China, and other Int’l Ideas

By Travis Johnson, Stock Gumshoe, April 30, 2010

Iain Little is a name that hasn’t come up here at Stock Gumshoe before, but he’s launching a new (I think) letter from Investorplace that focuses on international stocks called Global Wealth — charter subscribers are being asked to cough up $1,000, which is, of course, half of the “normal” price. And the pitch to get you in the door is that Little has several great ideas for unknown stocks that trade overseas … so let’s see if we can’t figure them out for a hair less than a thousand bucks, shall we?

The headliner is the “Wal-Mart of China” … here’s how he teases it:

“… it could make you just as rich as if you owned one of the greatest stocks in history during its best years.

“Remember—Wal-Mart is one of the greatest stock success stories of all time. Since 1980, it’s the best performer of all the dominant U.S. consumer franchises. Better than McDonald’s. Better than Coca-Cola. Better than Johnson & Johnson, Colgate-Palmolive and Procter & Gamble COMBINED.

“Since 1980, Wal-Mart is up 32,609%. Throw in dividends, and you would have made 39,916%!

“Now, I don’t blame you for being skeptical when I claim that a Chinese retailer you’ve never heard of is ‘the next Wal-Mart.’

“So let me show you exactly why I am claiming something so preposterous.

“First, in just their first 15 years, they are already the largest retailer in the Beijing region, and they have already captured 1% of the entire Chinese market.

“Second, this company is run not by merchants, but by IT and logistics experts. They are boldly copying Wal-Mart’s competitive advantages (fast inventory turnover, and an obsessive focus on costs) and using them to dominate!

“I could give you dozens of reasons why I love this company, but let me boil it down to 7 reasons why you can’t afford to miss out on this one:

1. Their market isn’t 300 million American customers—it’s 1,300 million Chinese.

2. Wal-Mart has already given them the blueprint—squeeze suppliers ruthlessly, cut costs from every part of the business—and they are following it to a ‘T.’

3. The Chinese Wal-Mart is already a master at this game—they pay suppliers in 80 days, but sell products in 27 days. Could you run a successful business with 52 days of free float? How about no need for bank financing of your inventory?


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