The class that I TA watched a documentary titled "Is Wal-Mart Good for America?" In order to present a different perspective on some of the issues covered in class I decided to quickly show them a graph of Wal-Mart's valuation/growth compared to Exxon and the S&P 500. The chart below is what I found. All three series are indexed, based on the adjusted share price from Yahoo! Finance. The right-hand axis is in logarithmic scale. The picture is one of growth. Wal-Mart's growth has drastically exceeded that of Exxon, but it was starting from much, much smaller. If the series were to show actual market values, Exxon would remain bigger (approx. $300 billion market cap for Exxon, to $200 billion for Wal-Mart). In effect, what the series show is what would have become of $100 invested in any of the three options in August of 1972. That hundred dollars, in a diversified portfolio made up of the S&P 500 would, in November, 2009, be worth $983.51 (0.7% growth per month). Invested in Exxon, it would be worth $17,826.19 (1.2% growth per month). If you'd had the foresight at the time of Wal-Mart's IPO to put that hundred dollars in the upstart 'general store', you would have enjoyed 1.9% growth per month: $136,575.
None of this is likely too surprising. What was surprising for me is the relative stagnation since 1999. First, let's recall that this is logarithmic scale, so although Wal-Mart's valuation looks quite flat since 1999, it is has fluctuated a great deal. However, it has not managed to break through what appears to be an accumulatory ceiling. This, despite the normalization of trade relations between the US and China. This was significant as after this normalization the US's trade deficit with China really took off. And, Wal-Mart is supposedly the exemplary beneficiary of this change.
As Sean said when I showed him the graph, "This is a story that needs to be told." What do others think is going on here? The only thing that immediately comes to my mind is that Wal-Mart's gains from the opening up of China were completely captured in expected earnings in 1999. China was already an increasingly significant trading partner through the 90s. It was only after the awarding of permanent normalized trade relations that Chinese imports, relative to US GDP crossed the 1% mark. However, the growth trend was already underway. It would appear that the establishment of normalized trade relations was, for the market, already a foregone conclusion, political grandstanding, notwithstanding.
A comparison of valuation and actual earnings would be informative, but will have to wait as earnings statistics are not as easily accessed as adjusted share price.
 These claims based on data from Foreign Trade Statistics, US Census Bureau: http://www.census.gov/foreign-trade/balance/country.zip
[link will download a zip file].