So far in this series, we have discussed General Electric (GE) and IBM. Berkshire Hathaway (BRK-B) exited both of these stocks in the last few years. Walmart (WMT) was another stock that Buffett exited in 2018. While General Electric and IBM have fallen from the levels when Buffett exited his stake, Walmart is actually higher. While Walmart’s returns lag Amazon (AMZN), Walmart isn’t a sinking ship.
Amazon has made life difficult for retailers. Since more consumers prefer online shopping, traditional brick and mortar stores have struggled. Several leading brick and mortar stores have closed in the last few years. They weren’t able to compete in a hyper-competitive market.
Should Buffett have stayed on?
As more competitors’ stores shut down, companies like Walmart might gain. Walmart has also been ramping up its online presence in the US market (SPY). The company has also entered India by acquiring Flipkart. Amazon is investing significantly in India. Earlier this year, Buffett made a bet on India by acquiring a small stake in Paytm. The company has a mobile wallet and e-commerce business.
While Buffett exited General Electric and IBM at appropriate times, it might be a little early to write off Walmart. Although the stock markets have been in love with Amazon, Buffett has stayed away from the company.
Along with the exits that we have discussed in this series, Buffett has cautioned against cryptocurrencies. Next, we’ll discuss whether cryptocurrencies could prove Buffett wrong.