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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: BreckHutHigh ⎊  😊 😞
Number: of 22353 
Subject: Re: Great Timing Jane !
Date: 02/06/23 12:57 PM
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"Overpaying for a business that is certain to exist and earn substantially more a decade from now will dampen results but is not likely to be catastrophic."

Am reminded of what Charlie said at DJCO meeting last year when asked about Costco. Costco shares closed on the day of that meeting (Feb 16, 2022) at $512/share. Shares trading at similar level today.

"Becky Quick: Charlie, another question came in about Costco. You recently talked about bubbles and high valuations in your home conference talk. Is Costco a part of that? Costco has never traded at a higher price to sales or price to earnings multiple. How should new investors think about Costco given its record run?

Charlie Munger: Well, that's a very good question, and I've always believed that nothing was worth an infinite price. So at some, even an admirable place like Costco could get to a price where you would say that's too high. But I would argue that if I were investing money for some sovereign wealth fund or some pension fund on a 30, 40, 50-year time horizon. I would buy Costco at the current price. I think it's that strong and enterprise and that admirable place. Now I'm not saying I would. I can't bring myself with my habits to pay these big prices, but I never even think about selling a share of Costco just because it's selling at a high price. So. If you stop to think about it, I bought at Christmas time, a flannel shirt, a bunch of flannel shirts at Costco. They cost seven dollars each more or less. And it was a soft flannel, and it was better and so forth. And then I bought pants, I think they were Orvis pants, and I pay like seven dollars, and they stretch around my waist and they're partly water resistant and what have you. Costco is going to be an absolute titan on the internet because it got curated products that everybody trusts and huge purchasing power on a limited number of stocking units. So, I'm not saying I'm buying Costco at this price, but I'm certainly not selling any. I think it's going to be a big, powerful company as far ahead as you can see. And I think it deserves its success. I think it has a good culture and a good moral ethos. I wish everything else in America is working as well as Costco does. Think what a blessing that would be for us all."

latticeworkinvesting.com - Charlie munger full transcript of daily journals annual meeting
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This community has written 21,861 posts about Berkshire Hathaway. The article-length ones it recommended most:
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