Recently, I had a conversation with my family, came across the topic of “if there’s one thing you can’t live without, what would it be”?
Gathered some thoughts and opinions, my dad told us about how much he saved from being a Costco member ever since the nearby store opened, and how much it saves our family a year is quite unparalleled. From cheap hotdogs to cash backs, to cheap ️. He even said that he might relocate if Costco ever decided to move somewhere further out. I know he was a fan of Costco, but I never knew how much of an obsession it actually was.
I’ve never really looked into Costco like that, sure I love the hotdogs I love the rotisserie chicken. I opened up my brokerage app, 52X multiple stock. I was pretty appalled, being a retailer with 12-14% margins and memberships, how does it warrant such valuation?
He told me Costco recently upped their membership prices in 7 years, and also said that even if Costco doubled membership costs he would probably be a member regardless.
I did some digging into the stock~ roughly an hour with couple videos, Munger’s favourite stock even though Berkshire has no positions on Costco(sold awhile ago), the company genuinely seems to have like no bad press, I tried hard to find something negative about the stock, only could find info about how happy the employees are, how well they take care of their employees etc etc. The Japan/China stores seem to be constantly flooded with insane membership numbers.
This truly begets the question: is Costco really just that amazing? Aside the high P/E, what should investors be concerned about?
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