Take a look at Walmart's stock chart and you would think its has no pulse. Since 1999, the company stock has basically gone nowhere trading between $43 and $60. In hindsight, it hasn't been a very good investment for those who own it. But for traders who like rolling stocks, it could be very profitable.
A Decade Of Boredom
Imagine yourself holding shares in Walmart since 1999. Lets say $100,000 worth. Unless you are a trader, you've made nothing holding this stock.
Ten years. Thats a long time of nothing-ness. Walmart's big growth spurt happened between 1996 and 1999 when the stock jumped up 600%. Since then, its been a poor investment, dead money if you will as you can see below:
Walmart is a component of the Dow Jones Industrial Average. If you own the DIA ETF or mutual funds that have Walmart in it, that a portion of your investment has gone nowhere too.
Majority Holders
Who owns the majority of Walmart stock?
- Barclays $4.8B
- State Street $4.4B
- Vanguard $4.0B
- Fidelity Management $2.8B
- Capital World $2.6B
- AXA $2.3B
- Bank of NY Mellon $2.2B
- T Rowe Price $1.6B
Thats $25 billion dollars of dead money. Out of fairness, most of these are invested in Walmart because they have to. That is, they have to mimic the Dow or a retail emphasized ETF/fund.
Don't Invest In Walmart, Trade It!
If a stock soars 600%, it behooves me why anyone would bother investing in it after that. However, here is a great example of a rolling stock where if you are a nimble position trader, you can pick off 10% long and short WMT. Do that 2 times a year and you can beat most mutual fund managers - just an idea.
About Kerry Kobashi
Kerry is the founder of KerryOnWorld. He currently lives in Silicon Valley and has worked over 15 years as an engineer and project manager. He owns Kobashi Computing, a consultant company.
- Kerry Kobashi's blog
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