The BKS company is doing a lot of things to make itself well-loved. You can read avbout some of them here in these posts. I also love the company, and love its web presence.
But as a stock, would it be good to own at this level? It is scary to look back at the chart from late 1995 to early 96 when the stock gave up about 35% of its value, before rising up to its current record highs. Perhaps it was fears about Amazon.com eating BKS lunch. A credible competitor can spook investors. Between Borders and Amazon, there are 2 competitors that aren't getting any smaller. In fact I have heard that Amazon dot com has doubled in size to the point where its computer facilities would fill the same volume as two (2!) refrigerators instead of one. Can we be complacent about the consumers willingness and ability to buy books at the current rate? Currently we enjoy record employment, record consumer debt, record consumer confidence. Can anything (duh...) go wrong? When (not if) the economy goes into a period of recession, there will be a much larger infrastructure of book superstores than there was in the last recession. To me this translates into fixed costs, and operating losses. Strange as it may seem, I believe BKS is capable of losing money as well as making it. This is why I am a
Without debating the likelihood of a recession, I'm not sure how bad a book store gets hit...when I can't afford expensive dinners, travel, skiing, even movies (at $6.50 per person; in a recession I wait for the vidoe) etc. etc., a book looks like a pretty good entertainment value...I buy quite a few books, but I bought even more when I was on a very limited budget and couldn't afford some of these other options.
Kind of like Coke in Asia...people were talking about how big their marketshare in Asia is and how they were going to get nailed with the Asian economic crisis, but one "luxury" people can still afford is a Coke...