Costco unchained 🛒

Chart library of Costco and a deep dive into its moat 🏰

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Americans love Costco. The products it sells are cheap, good quality and the customer service is satisfactory. Charlie Munger famously said that he will never sell his Costco shares. There has to be a solid reason for such high conviction. Today we will dive into the important charts of Costco, understand its moat, and see if it deserves to be in our moaty portfolio.

Charlie Munger’s favorite angel

Charlie Munger, the vice chairman of Berkshire Hathaway and renowned investor, has expressed admiration for Costco as a company for many years. He has mentioned several reasons why he likes Costco, highlighting its business model and management philosophy. We list them below.

1. High-Quality Management: Munger appreciates the strong management team at Costco led by CEO Craig Jelinek. He admires their focus on long-term value creation, ethical business practices, and their ability to consistently deliver results.

2. Competitive Advantages: Munger recognizes the competitive advantages of Costco's business model, such as its membership-based approach, bulk purchasing, and low-cost leadership. These factors contribute to the company's ability to offer value to customers and generate strong financial performance.

3. Strong Customer Loyalty: Munger values the high level of customer loyalty that Costco enjoys. He acknowledges the effectiveness of the membership model in fostering customer loyalty, resulting in repeat business and ongoing revenue streams.

4. Value Proposition: Costco's ability to offer quality products at competitive prices resonates with Munger's investment philosophy. He appreciates the company's focus on delivering value to customers, which aligns with his emphasis on investing in businesses that provide value to their customers.

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In the rest of the article, we will talk about:

• Costco’s unique business model

• Its SWOT analysis

• Its moat

• Its differentiation from competitors

• E-commerce strategy

• Why it’s one of the best at supply chain management

• And along the way, all the important charts you can’t miss about Costco

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