01-10-2016, 02:50 PM
(01-10-2016, 01:36 PM)Caversham Wrote:(01-10-2016, 12:13 AM)Rasec Wrote: Why the heck is Hershey's consumer staples and not consumer discretionary?
I agree with this. I have trouble distinguishing between Staples and Discretionary. I don't eat chocolate and haven't had soda for probably 5 years, so I don't see how KO, PEP, HSY, etc are considered Consumer Staples. Whereas I probably buy a pair or two of jeans every year so I don't see how VFC is considered a Consumer Discretionary.
Speaking of VFC, it is starting to approach fair value. I will probably buy if it reaches the mid-to-low 50s.
I will probably buy PG if it reaches the low 70s.
To me, "staple" has less to do with how much you really need a thing (versus it being completely frivolous or unhealthy) than it is related simply to how likely people are to make regular, recurring purchases of the thing. Of course nobody needs a candy bar, but you can reliably count on frequent recurring sales. While it is easy to think of clothing more as a needed "staple," the fact that you're more likely to buy clothes than chocolate during a recession tells you little. Sure, we all make regular, recurring purchases of clothes, but not always from the same brands / stores / companies. I'm much more loyal to Snickers than to the Gap!