To The Moon

The US midterm elections have delivered a political earthquake.

DEMOCRATS WIN BOTH CHAMBERS OF CONGRESS.

A blue wave.

Washington's balance of power is changing.

And after the violent technology selloff, investors are searching for somewhere safer to park their money.

Walmart?

Costco?

Consumer staples?

These seem like obvious choices.

After all, people still need groceries when the stock market crashes.

But look at what happened on Friday, November 6.

Nasdaq: +1.09%

S&P 500: +0.31%

Walmart: -1.72%

Costco: -1.13%

Interesting.

Technology bounced.

The supposed safe havens fell.

So is Wall Street missing an opportunity?

Or have investors already paid too much for safety?

I think the answer lies in two numbers.

45X.

And:

51X.

Those are approximately the trailing earnings multiples for Walmart and Costco.

And they expose a contradiction I think investors need to understand.

A DEFENSIVE BUSINESS IS NOT NECESSARILY A DEFENSIVE STOCK.

Let me explain.

🔥 FIRST, WHAT DOES THE BLUE WAVE ACTUALLY CHANGE?

Democrats have secured control of both the House and Senate.

But the new Congress does not take office until January 2027.

And President Trump remains in the White House.

This means divided government.

Potentially greater oversight.

More difficult negotiations over future legislation.

And greater attention to the cost-of-living concerns that shaped the election.

But here's where I would be careful.

A DEMOCRATIC VICTORY IS NOT AUTOMATICALLY A CONSUMER STIMULUS.

Campaign promises are not enacted policies.

Lower consumer prices do not appear simply because Congress changes hands.

Any major fiscal measures would still face legislative negotiations and potential presidential opposition.

So I would not buy Walmart or Costco purely because the Democrats won.

The better question is:

WHICH BUSINESSES CAN BENEFIT EVEN IF WASHINGTON DELIVERS VERY LITTLE?

And that brings us to Walmart.

🟢 WALMART: THE BUSINESS IS STRONGER THAN MANY PEOPLE REALISE

Walmart's latest reported quarterly revenue reached:

$187.9 BILLION.

Up:

5.9% YoY.

Global eCommerce grew:

23%.

Advertising grew:

38%.

Membership fee revenue grew:

17%.

And Walmart US eCommerce expanded:

24%.

These are not the numbers of an old-fashioned grocery business simply relying on customers buying more eggs and milk.

Something interesting is happening.

Walmart is becoming:

A RETAIL BUSINESS WITH HIGHER-MARGIN DIGITAL ENGINES.

Think about it.

A customer visits Walmart to purchase groceries.

But Walmart can also earn from:

Advertising.

Marketplace sellers.

Delivery services.

Membership subscriptions.

That gives Walmart more ways to monetise its enormous customer base.

And in a weaker economy?

Consumers may trade down from more expensive retailers.

Higher-income households may increasingly shop at Walmart for value.

This could help defend sales even when discretionary spending weakens.

But I don't want to overstate the resilience.

US comparable sales grew:

2.6%.

Below the prior year's:

4.6%.

Part of the slowdown reflected pharmacy pricing effects.

And some of the recent operating profit strength benefited from tariff refunds.

So the real test is whether Walmart can continue improving underlying profitability when temporary benefits fade.

I LIKE THE BUSINESS.

But that is only half the investment decision.

🚨 THE PROBLEM WITH WALMART IS ITS VALUATION

November 6 closing price:

$125.52.

Trailing P/E:

45.5X.

Forward P/E:

41.8X.

That is not a cheap consumer staples stock.

That is a premium valuation.

And premium valuations create a different type of risk.

Imagine a company grows earnings by 10%.

Excellent.

But investors reduce its P/E multiple from:

45X to 40X.

The approximate share-price change?

-2.2%.

Despite earnings growing 10%.

That's the mathematics.

Higher earnings can be offset by a lower valuation multiple.

And after a market correction, investors may become less willing to pay extraordinary premiums, even for defensive businesses.

So when someone tells me:

"Walmart is safe because everyone needs groceries."

I agree with the business logic.

But I would add:

AT WHAT PRICE?

Because I don't want to own a reliable business at a price that leaves very little room for disappointment.

🔵 COSTCO: AN EVEN MORE INTERESTING CONTRADICTION

Costco has just reported extraordinary October sales.

Net sales:

$24.50 BILLION.

Up:

12.6% YoY.

Comparable sales excluding gasoline and foreign exchange:

+7.3%.

Digitally enabled sales:

+22.5%.

These are impressive figures.

And Costco has an important advantage.

MEMBERSHIP ECONOMICS.

Its model encourages repeat visits.

Its value proposition supports customer loyalty.

And its scale helps maintain competitive pricing.

But Costco is not simply another Walmart.

Walmart is building a large advertising and digital marketplace ecosystem.

Costco focuses heavily on membership loyalty, purchasing efficiency and value.

Different operating models.

Different earnings drivers.

Yet both are attractive to investors seeking predictable consumer demand.

Here's the problem.

Costco closed Friday at approximately:

$1,053.55.

Trailing P/E:

50.8X.

Forward P/E:

46.2X.

That is a remarkable premium.

Even after the recent market turbulence.

So while I like Costco's business quality, I am not convinced that buying it at any price is an effective defensive strategy.

PREDICTABLE EARNINGS ARE VALUABLE.

But:

PREDICTABLE EARNINGS THAT EVERYONE HAS ALREADY PAID A PREMIUM FOR CAN STILL BE RISKY.

And that brings us to the most interesting part of this investment debate.

🧠 WHAT IF THE BLUE WAVE BENEFITS RETAILERS LESS THAN EXPECTED?

Consider three possibilities.

1. CONSUMERS TRADE DOWN

Consumers become more value-conscious.

Walmart and Costco may gain shoppers or market share.

Bullish.

2. PRICING PRESSURE INCREASES

Political attention shifts toward affordability.

Retailers compete even more aggressively on prices.

Revenue could grow.

But margins may remain under pressure.

Not automatically bullish.

3. POLICY UNCERTAINTY PERSISTS

Tariffs, labour costs, taxes and future fiscal negotiations remain unresolved.

Retailers must navigate these pressures while maintaining low prices.

Again, not automatically bullish.

That is why I think investors should stop treating the blue wave as a straightforward consumer-staples trade.

THE WINNER IS NOT NECESSARILY THE COMPANY SELLING THE MOST GROCERIES.

It may be the company best able to protect margins while delivering lower prices.

And right now?

Both Walmart and Costco have strengths worth respecting.

But neither is immune to valuation compression.

📍 MY WALMART BUYING MAP

Reference price:

$125.52.

My preferred trading framework for the next 2-4 weeks:

🟢 ABOVE $130-$132

BULLISH CONFIRMATION

A sustained breakout with strong buying would make me more constructive.

Potential recovery:

$135-$136.

🟡 $122-$124

PREFERRED PULLBACK WATCH

This is closer to where I would assess a small starter position if price stabilises and the business outlook remains intact.

I would not blindly buy merely because the price reaches the zone.

🔴 BELOW $119-$120

THESIS AND TREND CHECK

A sustained breakdown would weaken my immediate recovery setup.

I would reassess before increasing exposure.

And remember the next major catalyst.

WALMART REPORTS EARNINGS ON NOVEMBER 19.

That is the real test.

I want to see:

US comparable sales.

eCommerce growth.

Advertising profitability.

Operating margins.

Holiday-quarter guidance.

A strong report accompanied by improving margins could justify more optimism.

But a disappointing guide could pressure a stock already trading at a premium.

📍 MY COSTCO BUYING MAP

Reference price:

$1,053.55.

🟢 ABOVE $1,095-$1,100

STRONGER BULLISH CONFIRMATION

This would suggest buyers are willing to challenge the previous high region.

🟡 $1,020-$1,045

MY PREFERRED PULLBACK WATCH

More interesting than chasing above $1,050.

But I would still require stabilisation and evidence that investors remain comfortable paying Costco's premium multiple.

🔴 BELOW $1,010

CAUTION

A sustained break would suggest the recent recovery has weakened.

I would rather preserve cash than automatically average.

Costco's next quarterly earnings are currently scheduled for:

DECEMBER 10.

Until then, I am watching membership economics, traffic, comparable sales and margin trends.

These price zones are my conditional trading references, not guaranteed support or price targets.

🔮 MY THREE RETAIL SCENARIOS

My subjective probabilities for the next 2-4 weeks.

🟢 BULL CASE: 30%

Consumer spending remains resilient.

Retailers continue gaining market share.

Walmart delivers reassuring earnings.

Investors rotate toward consistent cash-generating businesses.

Potential price zones:

WMT: $132-$136

COST: $1,095-$1,120

My approach?

Buy confirmed strength selectively.

🟡 BASE CASE: 50%

This is my preferred scenario.

Walmart and Costco continue performing operationally.

But valuation premiums limit share-price upside.

Technology stocks recover selectively, pulling some capital away from defensive retailers.

Potential trading ranges:

WMT: $120-$132

COST: $1,015-$1,095

My approach?

Watch for constructive pullbacks.

Avoid chasing.

🔴 BEAR CASE: 20%

Consumer spending softens.

Pricing competition pressures margins.

Earnings guidance disappoints.

Investors begin reducing the premiums they are willing to pay for defensive retailers.

Potential downside zones:

WMT: $112-$120

COST: $940-$1,015

My approach?

Protect capital.

Do not confuse a good company with an automatically attractive investment.

🔥 SO WHICH WOULD I ACTUALLY BUY?

Between Walmart and Costco?

I LEAN TOWARD WALMART.

Not because Costco is a weaker business.

Far from it.

Costco's membership model is exceptional.

But Walmart offers several additional ways to grow earnings through eCommerce, advertising, marketplace services and membership revenue.

And at current prices, Walmart trades at a somewhat lower earnings multiple.

That gives me a slightly more attractive starting point.

However, I would not make a large entry immediately before Walmart's earnings.

My preference?

START SMALL ON CONFIRMATION.

And keep cash available.

Because in a market where the Nasdaq can fall more than 5% in one session, I don't want to replace one overcrowded trade with another expensive trade.

🧠 HERE'S WHAT I THINK THE MARKET IS REALLY TELLING US

The blue wave is changing expectations about Washington.

But the larger investment opportunity may not be political.

It may be behavioural.

Consumers still need value.

Retailers that deliver value efficiently can gain market share.

And companies that combine defensive demand with profitable digital growth could be rewarded over time.

But here's the twist.

THE MARKET ALREADY KNOWS WALMART AND COSTCO ARE GREAT BUSINESSES.

That's why their valuations are so high.

The real opportunity appears when the market becomes too pessimistic about their future earnings.

Not simply when investors become frightened of technology.

That is the distinction I want to make.

🔥 MY CALL: DON'T CONFUSE SAFETY WITH EXPENSIVE CERTAINTY

I believe Walmart and Costco deserve a place on a quality-stock watchlist.

And I believe they may offer greater earnings resilience than many speculative technology companies.

But I would not call either a risk-free safe haven.

Not at:

45X EARNINGS FOR WALMART.

And:

51X EARNINGS FOR COSTCO.

These are valuations that still require strong execution.

My strategy?

WMT: MY PREFERRED RETAIL WATCH.

COST: EXCELLENT BUSINESS, PRICE-SENSITIVE ENTRY.

CASH: STILL IMPORTANT.

And most importantly:

WAIT FOR PRICE AND FUNDAMENTALS TO ALIGN.

Because a falling technology market does not automatically make every consumer staples stock cheap.

And a blue wave does not automatically create a retail earnings boom.

For me, the next question is not:

WILL PEOPLE KEEP SHOPPING AT WALMART?

Of course they will.

The more important question is:

HOW MUCH SHOULD I PAY FOR THE PROFITS WALMART WILL GENERATE?

That is where good investing begins.

A SAFE BUSINESS AT THE WRONG PRICE CAN STILL BE A RISKY INVESTMENT.

I am not a financial advisor. Trade wisely, Comrades!

Would you buy WMT or COST as defensive stocks after the blue wave, or keep cash and wait for better valuations?

If you find this post interesting, give it wings! 🪽 Repost and share the insights.

Do consider ‘Follow me’ and get firsthand read of my daily new post. Thank you.

@Tiger_SG  @TigerEvents  @Daily_Discussion  @TigerStars  @TigerPM