The film The Corporation mentions that a corporation is an externalizing machine that tries to get the rest of society to pay the costs of its actions.

So can I be angry at a corporation that takes advantage of what society offers it? Yes. What can I do about it? I can lobby with my shares and voice to get WalMart to stop taking free money (my tax money) from the government, or I can lobby the government to stop giving my money to WalMart. I think the bigger fault here lies with government, not with the corporation. MarketWatch.com summarizes information about WalMart's subidies. Walmartsubsidywatch.org tells you exactly how much of our money government officials (people working for us, the taxpayers and citizens) are giving to Wal*Mart. As a shareholder I benefit from the free money government gives away (after some begging by WalMart, I'm sure).

As for my holdings in WalMart (WMT – $51.05 ) shares, I think WalMart's big growth phase is basically over. Once companies start relying on government handouts for profit growth instead of innovation and customer service, it's usually a bad sign. However, I do not thing WalMart is doomed. I think it will limp along buying back stock and returning profits to shareholders. I own the stock and am short $47.50 strike calls. That means I don't benefit from upside above $47.50 a share, but I do get to keep the premium at which I sold those calls. I would not buy the stock at $50, but below $47.50 I do think the the company represents value even given it's slower growth.

So go to walmartsubsidywatch.org, click on your state at the map, figure out which local politicians are giving away your money to Walmart, and call them out or vote them out. Don't buy the stock above $46 or so (that's a p/e below 15, which is what WMT deserves, not its current price earnings ratio of 17.4).

Disclosures and confessions: I own WMT and am short Jan 2008, $47.50 calls . I am also short Jan 2009 $40 puts . I bought a really cool Sony Camera at a WalMart in Missippi recently during my drive to New Orleans.

The Panelist Disclaimer
Additional Disclaimer: Options may be for me but they are not for everyone. They are probably not for you. Don't try any of the options strategies mentioned above for yourself – you can get badly hurt and lose more than your origional capital.

photo by David Neubert from Flickr