What is Costco?

Perpetual purpose trusts (and related 'spiritual holding company' structures including employee ownership trusts and non-profit foundations) are worth watching as a governance category that demonstrably outperforms conventional corporate structures on longevity, R&D investment, and shareholder returns.

“I use the omnibus term spiritual holding company to describe this category of things.”

Costco generates roughly $3 billion per year in retail gold sales with approximately 25,000 customers per month buying physical gold in stores.

“It's still $3 billion a year, $25,000 customers a month who went into a store and bought gold. They weren't going to do that 10 years ago.”

Costco is worth watching as a mainstream retail channel for physical gold, with $3 billion in annual gold sales signaling broad democratization of gold demand among ordinary consumers.

“It's still $3 billion a year, $25,000 customers a month who went into a store and bought gold. They weren't going to do that 10 years ago.”

Costco's mission, widely assumed to be unprotected, is actually embedded in a governance fortress within its corporate structure.

“People used to tell me Costco was an example that wasn't protected. So much so that like I was surprised to learn that it was embodied in a governance fortress.”

Liquidation washers and dryers sourced from Costco or GovDeals at roughly $250 each can be flipped on Facebook Marketplace for $750 to $900, a 3x to 3.6x return.

“I bought $7,000 worth of washers and dryers for 250 each on average and I'm selling them on Facebook Marketplace for 750 to 900 each.”

Investor Nick Sleep's concept of shared scale economies describes companies that pass cost savings from scale back to customers, which he identified as the best predictor of long-term investment value.

“He realized that the best predictor of long-term value for him was something that he called shared scale economies.”

Costco routinely receives the worst possible governance rating from governance rating agencies, suggesting the ratings penalize successful outlier structures.

“Costco routinely gets the worst possible governance rating from governance rating people.”

Sam Parr's framing on finding passion: most people fail not from lack of persistence but from insufficient exposure to options, analogized to never sampling enough items at Costco.

“I think what most people don't do is they don't really get to walk around Costco and sample the things.”