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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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Investment Strategies / Falling Knives
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Author: mungofitch ✹✺🐝 SILVER
SHREWD
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Number: of 1198 
Subject: Re: Costco
Date: 06/21/24 3:01 PM
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No. of Recommendations: 11
Now up to $868 / share <moan>

Nah, don't moan.
If you owned it lately, you'd be thinking of selling now. And I probably wouldn't argue.

Figures from further up thread:
Average trailing earnings yield 20 years ago through 10 years ago equated to a P/E of 23.2
From 10 to 5 years ago that average was 28.9
In the last 5 years, 38.1.


The current figure is a little over 53. That's not just a high number, but it's a whole lot higher than its own usual figures.
Sure, it's a great firm, but there are lots of great firms, no?

As a random comp, again one of the very very few good businesses in retail, ever looked at Alimentation Couche Tard? (rough translation "night owl foods") ATD.TO, or a lightly traded ADR of ANCTF in the US.
If you don't know them, it's a Canadian-HQ chain of convenience stores in multiple countries, owner of Circle K among other brands, and attached gas stations. Like Costco it has earnings growing through the years like a juggernaut and a stock that never seems to sell off, but unlike Costco it's not wildly more expensive than its usual level. Trailing P/E around 19.

It's not a perfect company, and it's not Costco. But you do get about 2.8 times the initial trend earnings yield and a relatively comparable history of EPS growth...though a bit slower lately.

I owned it for a while and made good money, unsurprisingly. Then I did something stupid. During a market sell-off, almost everything I own or follow sold off...except this (see note above: "never seems to sell off"). So I sold it to buy something else on a big dip. This move made me the "big dip", because it's rarely cheap enough to me to feel good getting back in, and I haven't owned it since. <moan>

Jim
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