Thursday, December 22, 2005
Comerade Brad takes time out of his busy day to inform us that "
the market makes no sense." Perhaps it makes no sense to him. Then again, no one ever accused Brad Warthen of having the intellectual heft of, say, a
John Kenneth Galbraith or a
Snoop Dog.
Brad can't understand why Wal-mart is considered a better investment than
The State even though the latter has higher profit margins.
Let's put it this way: Wal-Mart has over $200 billion in market capitalization. They have over $300 billion in sales. They have over $4.5 billion in the bank. They could buy Knight Ridder in cash tomorrow and it would look like a rounding error on their balance sheet.
But perhaps more important than the statics are the dynamics. People aren't wondering whether retail shopping is going to exist in 15 years. They do wonder whether newspapers can possibly sustain themselves. Arrogant, badly written, out-of-touch, low-value-added newspapers are worst—and that's where
The State and Knight Ridder come in.
The investors are playing with their own money. They're smart. They can see the handwriting on the wall. And maybe they're getting out while there's still time.
Posted by Bill Smith at 10:12 AM |
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