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Bill Ackman Talks about JC Penny on CNBC
Posted by: GuruFocus (IP Logged)
Date: November 13, 2012 08:28AM

Bill Ackman on CNBC. He said that the turnaround of JC Penny (JCP) will take years. Ackman got into JCP at $25. Now it is about 50% off. "It will have pains..."

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Re Bill Ackman Talks about JC Penny on CNBC
Posted by: crafool (IP Logged)
Date: November 13, 2012 03:01PM

You know I listened to Ackman's interview. I have always had a hard time with retail stocks like Gap or Limited but not Wal-Mart, Target, Costco, Home Depot, Lowes or Sears. I guess I am saying I have had success with utility like retailers and not fadish retailers. I just don't know what fad or style people are going to like next and when or when they will no longer like it. It is out of my circle of knowledge and I imagine a lot of other investors as well. I am not sure Bill Ackman can do it either.

I see Ackman's major premise is that Ron Johnson is a genius based upon his success at Apple. I think a lot of people would say he has a great reputation as a businessman. My problem is I remember that Warren Buffett taught something like the following:

"You tak e a businessman with a great reputation and put him into a business and industry with a poor reputation. It is generally the business and industry that keeps their reputation in the end."

Retailing is tough. I look at the average mall or strip shopping center and I see vacancies. I see competition from the internet that just keeps moving deeper and deeper into the bricks and mortar retailers backyard. Best Buy and Barnes & Nobel would likely agree with me.

I think JC Penny should go into what Warren Buffett and his partner Charlie Munger would call the "Too Hard Pile".

Happy investing to all.

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