(This is an excerpt from an article I originally published on Seeking Alpha on April 14, 2013. Click here to read the entire piece.)
I quickly caught a Bloomberg headline about plans from Vornado Realty Trust (VNO) to sell more than it buys. I went to the VNO 2012 annual report to see for myself the entire context of statement. It comes at the end of the financial highlights section….{snip}
A lot is packed into this statement. Typically, a bubble comes at the END of a tremendous economic expansion. So, I find it a bit strange for Vornado to observe both a foothold of a major economic expansion AND a bubble on the horizon. Moreover, the statement indicates a belief that housing is a part of this expansion and that it is real. Vornado also implies that easy money is an important enabler and that low rates will last a lot longer than expected. Low rates should not persist in a major expansion.
Putting this all together, I am assuming that Vornado is anticipating a long-lasting strength in the economy where monetary authorities will be quite reluctant to take their collective feet off the pedal out of fear that the economy would immediately go into reserve. {snip}
{snip}
Vornado has reason to worry. Amazon’s implicit focus here is to move fast, stay ahead of the competition, and never get caught reacting to competitive pressures. This is the exact opposite position of commodity retail where the current focus is figuring out how to react to the internet. Best Buy (BBY) and WalMart (WMT) are perhaps most recognized for fighting this battle. Best Buy has been rolling out store-in-store concepts and price guarantees. {snip}
{snip}
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on April 14, 2013. Click here to read the entire piece.)
Full disclosure: No positions