The business press loves talking about a stock after a major fall in price, and specifically about how obvious it is that it was a crummy business all along. Doubly so when its an outfit that Dollar General or META, when many readers didn't have much love for the business model in the first place.


I think this is exactly right. All of these quality problems have been around for years, for dollar stores, and yet they have done well. Now that they have had disappointing earnings for a couple of quarters, we hear about how terrible they are, how there's rampant theft, the aisles are filthy, the big stores have better prices, etc. etc., and it all seems more convincing now that the glow has gone off their stock price. But I haven't seen any convincing evidence that there has been any tectonic shift that will make these shitty stores any less profitable than before.

META is a very good comparison. I bought a bunch of shares under $100, because a couple of bad quarters (overspending on metaverse R&D, Apple cutting into their advertising dollar) led to headlines everywhere that their business model was dead. Unfortunately, I sold at about $200, and should have stayed around for $300, the current price.

Except for a few instances where the business model really is broken, the word should be, "This too shall pass." You can never be entirely sure whether the dip is temporary, or the beginning of a long-term decline, but I see no convincing evidence of the latter. And if it is a dip, the current price will end up being a very nice entry point. Reminder to self: don't sell at $200.

Regards, DTB