I noticed that you trimmed your stake in Wal-Mart and increased it in Target. I was wondering if you might talk about Target, its position and why you like it so much.
What I would say is we bought most of the Target before we sold any Wal-Mart. Sequoia still holds Wal-Mart.
Interestingly, I think if you look over the last seven years since 2001, Wal-Mart and Target have almost identical EPS growth rates. I think going forward, both are likely to have pretty good EPS growth rates. Right now, Wal-Mart might be a little bit better positioned in that its business is more oriented to food, commodities and staples.
One difference between the two companies is that Wal-Mart has allocated a fair amount of its capital to opening stores abroad, whereas Target is strictly in the United States. I would say generally we have a preference for companies that do have foreign exposure, but in this case, Wal-Mart has failed to demonstrate to date that they can earn the kind of return on investment abroad that they've been able to earn in the United States.
As some of you may know, they've exited a couple of countries. Germany was a particularly expensive exit. They exited Korea. They've put a fair amount of money just recently into a struggling Japanese chain, and it's going to be a turnaround. Terence or David — how would you describe the return on investment, on ASDA, for example?
The return on ASDA has not been great. Part of the reason that Wal-Mart's returns overseas are less attractive in places like the UK than they are in the US is that they don't have the same kind of structural advantages there that they have here.
One of Wal-Mart's big edges is its ability to get goods from the supplier to the store very, very efficiently. It's harder to do that in countries like the UK. Is just not easy to get around. Wal-Mart's edge here, which is their superior logistics courtesy of our highway system, just doesn't exist in a lot of other areas. Their big differentiator is just not as important over there as it is here. I don't think they will ever be able to get the kind of returns overseas that they get in the US, but they'll do okay.