DCF Conclusion Study on Walmart (WMT)

Most important Retail name along with Costco in S&P 500

We’ll be doing a DCF Conclusion Study on Walmart today. But first, a quick market recap.

We got 2 more positive catalysts today that is helping to further cement the ongoing recovery market rally. Retail Sales were strong, helping to unleash breadth widening. Unemployment claims were tame, helping to reduce the tail risk that a hard landing is imminent (perhaps later, but not right now).

Our note last week that we could soon see a big breakthrough in QQQ ETF (NQ) is now paying off (Paywall removed, now that members have benefited from it). We had put the probability of a big breakthrough to be around 65%.

Back in early August during the July Jobs report release and big market crater, I had sent out a brief message on 8/2/2024 that I was buying a bit of everything.

From then on, my core message has been “Strong Hold”. I haven’t done anything since. Haven’t added, haven’t sold. Just Held.

Sometimes the best activity is Inactivity.

What does Strong Hold mean? It means exactly that - once you’re in, Hold it as long as possible. At swing lows, don’t try to scalp it, trade it, flip it, just Hold it. And ideally, forget about it.

Once a good swing low/DCF Bear Case entry is secured, the best return profile comes from Holding and putting our investor hats on.

Scalping/trading works well when markets are back & forth, but not when the market is moving in one large trend because it cuts off the upside potential prematurely.

Naturally, the turmoil at the time may have tempered any enthusiasm among the folks about buying the crater. Totally Understandable.

If you missed this past recovery sequence, do not worry, I’ll find the next one for you. Patience always pays off, and there will be more opportunities later.

However as of now, retail investor sentiment is still extremely fearful (see below).

Even after a large recovery sequence, the Fear & Greed index is still stuck in Fear.

And if we were to look at the timeline of sentiment, we’re barely only beginning to recover.

To better understand the retail industry’s health, which is driving today’s rally back above the mid-point of the recent selloff, we’re going to do a DCF Conclusion Study on Walmart.

I’ll add the outcomes of WMT’s Bear/Base/Bull case into our Dow ETF Table below.