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Take a Memo - Staples Needed for Your Portfolio

February 09, 2012 | About:
David Chulak

David Chulak


About the author:

David Chulak
David Chulak is a private investor that uses a value approach to investing in the styles of Graham & Dodd and Warren Buffet. Looks for that margin of safety in an effort to preserve capital and attempts to guard against short term market fluctuations by having clear rules laid down in advance for selling an equity. Likes to visit the company's where his investments are in order to understand the business better.

Rating: 3.7/5 (14 votes)


Batbeer2 premium member - 2 years ago
Thanks for an article worth reading.

>> While I see no economic moat for the company, they have vastly increased their bargaining power for purchasing supplies and have increased their efficiency in delivering the products to their customers.

For delivery, I believe there is are barriers to entry other than purchasing power. Office supplies are heavy. Particularly in relation to their value. Transport is probably 20-50% of the total cost.

If you are dominant in a particular geographic area, you can send a single truck with supplies through town and drop off supplies at every other office. If your market share is lower, you have to dispatch a truck for each order. Your costs will be higher, and you'll get killed.

Think garbage collection in reverse.
Davidchulak premium member - 2 years ago
Good point. They are truly working on their delivery efficiencies, so they could be working towards building a moat, however small. Just don't think they are there yet. My money says they will get there with there plan. Thanks for the nice words.

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