Blog about the upcoming food shortage crisis

Everybody throws stones at the prophet, but when the crisis comes they yell: “Why nobody warned us?”

Tesco suffers after questions are asked about food retailers

The one thing that annoys me the most is the ignorance. Ignorance is not considered as a sin, but if we asses the implications of ignorance and the price people have to pay for it, we would probably haste to change our mind. It takes a lot of effort and expense to learn something, but it pays off in the long term, as you can learn on your mistakes. Of course to learn on your mistakes you first need to accept that you made a mistake.

Morgan Stanley has lowered the target price of Tesco plc shares from 480p per share to 345p per share according to the Times Online and FT.com. This made Tesco shares move down 1.8 percent (402p a share), and according to the Google Finance shares closed at 400p.

The person responsible for the downgrading of the shares price is Geoff Rudell, Morgan Stanleys leading analyst.

“Consensus forecasts appear to assume that Tesco, Sainsbury and Morrison will all continue to grow UK sales by 6-9 per cent per year,” analyst Geoff Ruddell said. “We do not believe this is possible in a market that, we think, is likely to grow by 2-3 per cent per annum over the next couple of years,” he continued.

And I do believe that it is possible in the market that is likely to grow 2-3 percent per annum. Especially if we take rising farmers and retailers revenues and the ability to pass the rising expenses over to theĀ  customers. Shopping bills are increasing and it means retailers make more profit. Alcohol and tobacco industry will thrive as well, because people would rather cut other expenses to pay for alcohol and tobacco.

P.S. Morgan Stanley owns shares in the Federal Reserve bank, which is private. Read more here.

sources:

1. FT.com

2. Times Online.

Advertisements

March 12, 2008 - Posted by | Uncategorized

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: