Dear Mr. Berko:

I followed your recommendation last year and sold Sears, Roebuck and Co. at $54.75. However, I only sold 200 of my 400 shares. I’m now considering the sale of my remaining 200 shares and thought I would use the money to buy 200 shares of Wal-Mart. However, I’ve read that Costco pays its people $16 an hour vs. $11.50 for Wal-Mart; Costco pays health-care costs of $5,375 per person vs. $3,500 for Wal-Mart; Costco annually contributes $1,400 to its workers’ retirement plan vs. $745 for Wal-Mart; 50 percent more Costco employees are covered by a retirement plan; and Costco’s employee turnover is one-third that of Wal-Mart. I think I might buy Costco instead. Please tell me if I’m making the right decision.

S.R., Waukegan, Ill.

Dear S.R.:

I saw those numbers, too, which were first published by academics whose theories about making money are just that — theories. While I prefer shopping at Costco Wholesale Corp. (COST-$37.34) to Wal-Mart Stores Inc. (WMT-$55.49), I would prefer to own WMT stock instead of COST.

Costco may be a good neighbor, but Wal-Mart is a better-managed company. In this business of investing, it’s the bottom line that counts. Kindness and goodness aren’t worth a pickled herring. Although COST may have a kind, empathetic and sensitive social conscience, hard-driving, hardhearted and hardheaded WMT is doing precisely what its shareholders want it to do. It’s making money, lots of money, and paying a dividend that has increased fivefold in the past eight years.

While COST’s wages are 40 percent higher than WMT’s, while twice as many COST employees are covered by health-care plans and while COST spends twice as much in worker retirement costs, etc., WMT’s all-important net profit margin of 3.4 percent is twice as much as COST’s 1.7 percent. This means that for every dollar in revenue, WMT makes 3.4 cents in profit compared with 1.7 cents for COST.

Putting it another way, this means that Costco employees have to sell twice as much product, load the delivery truck twice as often, stock the shelves twice as frequently and serve twice as many customers to make the same amount of money as Wal-Mart. If you want to extend this to a relevant extreme, the Costco employee who earns $16 an hour has to work twice as hard as a Wal-Mart employee who earns $11.50 an hour. Frankly, I don’t think that’s fair to the Costco employee. In effect, he’s doing twice the work for only 40 percent more pay.

If you and your broker want to be socially conscious people, donate money to a charity of your choice. Investing is for making money, not for appeasing your soul with feel-good choices.

Let’s face it, both COST and WMT sell the same products at virtually the same price. However, Wal-Mart has the hustle, the bustle and the muscle to make twice as much money from the sale of a box of Cheerios, a paperback novel, a pair of jeans, a set of Goodyear tires or a TV as Costco.

Finally, I agree with your decision to get rid of Sears, Roebuck and Co. (S-$38.35). I think Sears is a dinosaur. Revenues have been ranging flat to lower over the past seven years, gross margins are declining, operating margins are in denial and net profit margins continue to slide. Sears’ time has come and gone.

Home Depot and Lowe’s are eating Sears’ lunch and Target and TJ Maxx are nipping at its heels. Sears is now a colorless, vapid, dull company. It doesn’t have a theme and it lacks charm, charisma and consumer appeal. Sears is boring. So is its unimaginative management team. Sears has lost touch with its customer base and its Lands’ End acquisition may not be living up to its potential.

Margins are being hurt by excessive discounting, and many of its stores, though clean, look old, lack character, have no panache and frankly are unattractive and boring places in which to shop. The company’s restructuring efforts over the past two years have been unsuccessful and it continues to lose market share. So, yes, sell your Sears. This company, which once defined America, appears to be slowly fading into the ether like the DeSoto, the Packard, the Hudson and the Studebaker.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.