Leave it to Charlie Munger to find a Trump antidote in Costco.
During Charlie Munger’s final conversation with investors in Pasadena, California last week, the Berkshire Hathaway VP said he would argue that Costco is one of the most admirable firms in the world and that its CEO, Jim Sinegal, is one of the top executives in the world.
The Inoculated Investor was at Munger’s grand finale and took notes paraphrasing Munger’s last pearls of wisdom (he’ll still talk at Berkshire’s annual meeting, but the days of his intimate annual “Conversations” are now over).
His notes on what Munger said about Costco are below.
Charlie can’t say enough about his admiration of Costco. But the world has figured it out and the stock sells at 25x earnings. The world should work that way—finding great places to invest. If you are comfortable with 25x earnings, slow advances, and working with great people, Costco at 25x earnings is one of the most admirable capitalistic institutions in the world.
It is a total meritocracy. They pass on savings to their customers as if it were a moral duty. The company is losing money in the short term to make money in the long term. Everyone in the room should go through Costco’s annual report. In fact, every time Donald Trump says something and you get discouraged, just think about Costco.
The point: There are some executives that really are admirable.