August 21, 2023

New Episode: Costco

Costco is not only Charlie Munger’s favorite company of all time (plus he’s on the board, natch), it’s an absolutely fascinating study in how seemingly opposite characteristics can combine to create incredible company value.

For instance: Costco has the cheapest prices of any major retailer in America — and also the wealthiest customer base. They pay their hourly workers 30% above the industry norm (and give them excellent healthcare + 401k benefits) — and are almost 3x more profitable on labor than Walmart.

Speaking of Walmart, Costco stocks 40x fewer SKUs than their Bentonville-based rivals — yet sells an average of 15x more volume of each. And oh yeah, practically all of Costco’s C-Suite started their careers as baggers and checkout clerks! Tune in for a mind-bending exploration of one of the world’s most iconic — and iconically unique — companies.

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Nike Follow-Up

We got a bunch of great follow-up from listeners after our Nike episode. Here are some of the most interesting tidbits:

Phil Knight wasn’t a journalism major at Oregon, but rather a business major. We can’t be too upset about making a mistake here though, since one of the books we used for research had it wrong!
Carolyn Davidson’s grant of 500 shares came in 1983, not at IPO. This means that the stock has split 6 times — not 7 — between then and now.
Americans (including us) all pronounce “Onitsuka” incorrectly. Here’s the real pronunciation.
Michael Jordan got a royalty from ALL shoes in the Nike Air line, not just basketball shoes.
Uber’s “toe stepping” principle did not refer to “stepping a toe over the line.” Rather, it was the idea that employees shouldn’t be afraid to “step on other people’s toes” within the organization.

Next episode...

Our next episode… is one of the world’s greatest companies which has reinvented itself twice before (as chronicled previously on Acquired), and has done so again in the past 18 months.

Can you guess what it is?