Taste the difference

Malthusian

letspretendforaminute wrote: »

Technology companies will still be here (I had a good run on tech) but you can’t eat silicon and Sainsbury’s is diversified, defensive and what they sell will never go out of date, unless protein pills takeover.

The same was true of My Local.

coyrls

I suggest doing some research on Sainsbury’s success or otherwise with stock management automation.

redux

I agree with everyone else that a single company is overcommitment.

If a single company is or was the way to go, compare it to starting 30 years ago in Microsoft, switch 10 years ago to Apple. Then compare it to plenty of companies that fell to a thousandth of the value or don't exist any more. For example GEC, once one of the most steady and cash-rich companies there was.

If you can't shake out this train of thought completely, and like the idea and conviction and commitment of being in nice steady companies in sectors that will be around for some time, you might look at the fund Fundsmith.

Some would argue against even that, as it might just be in vogue and what reason is there to assume past performance continues, but at least it's spread over about 30 very good companies, not one.

I'd say look at investment trusts ...

AnotherJoe

letspretendforaminute wrote: »

Technology companies will still be here (I had a good run on tech) but you can’t eat silicon and Sainsbury’s is diversified, defensive and what they sell will never go out of date, unless protein pills takeover.

Yes, but what they sell is sold by many others, exactly the same. So their ability to differentiate and thus sell at a higher price is very low. Whereas an Apple, Amazon, Tesla etc have a lot of differentiation between what they sell and similar products, and thus more room to set their own prices and margins.

letspretendforaminute wrote: »

I’m reserving judgment on the discounters, they’ve very little fat to cut and their offering is vastly different to that of traditional supermarkets, and somewhat inferior. Products and experience, queues, variety, parking etcetera.

I dont find that to be the case if i compare, say LIDL with any of the traditional supermarkets with the exception of variety, and even there there are often times that a shelf in say Tesco or Sainsbury looks good but has actually just a very large number of the same things on it (always own brand) so there isn't really as much variety as you'd think from the shelf-space.

And you might be reserving judgement but i'm sure i read a press release recently that said that either Aldi or LIDL were opening up 400 stores in the UK so they must be pretty sure that the market is working for them. You wont see an announcement that Sainsburys is opening 40 stores let alone 400 and without more stores, their ability to grow is very constrained.

letspretendforaminute

Coyrls. I am well aware that Sainsbury’s has been weak in this area which is why acquiring Argos was such a coup as they had invested heavily in stock management prior to takeover.

Malthusian. My Local was touched by the poo stick that is private equity and the LLP that did so realised maximum value by sinking the business. They have form for this comet and now monarch airlines.

letspretendforaminute

Redux. I have money in Fundsmiths already, plus a vanguard FTSE 250 one.

redux

bowlhead99 wrote: »

Try selling £30bn of retail products per yr where every unit you sell has to have an individually handwritten price tag and you need to log your sales in a book ( (exclusively cash sales of course) so somebody can add them all up and put the order in with a carrier pigeon to a number of suppliers to see which one can deliver you the replacement merchandise the quickest this week.

You missed out throwing stuff away when it goes off, because you were too busy with all the other paperwork to run a sell-by date system.

talexuser

Before I took over my partners portfolio more than 20 years ago she had a bunch of large cap "utility/safe" shares from her father including Sainsbury. She had some very nice dividends over the years, but when we sold the capital value of Sainsbury was nearly half when she was given them from her dad. Even assuming the dividends had been reinvested the return was not as good as the funds she has been in since. Maybe a lesson about individual shares?

Alexland

I don't think the OP will agree but putting so much concentrated risk in any single company is madness when there are so many better options.

Amoux

I can only echo the same sentiments shared by the vast majority in this thread.

The lack of diversification is generally a bad idea, but like anything in the investment world it could potentially work for you if you are willing to take on the risk. I personally would not take that risk. I admit to not knowing all the ins-and-outs of the market but I take the view that many of the large supermarkets like Sainsburys are under intense pressure right now by rapidly growing discount competitors. I don't see that immediate downwards trajectory changing anytime soon. But who knows?