🧠 Why There'll Never Be Another Costco


View Online | Sign Up | Advertise

Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better.

Today's Issue Read Time: <3 minutes

  • Lesson: Shining example of capitalism
  • Timeless Content: Hidden struggles
  • Thread: Why new investors lose money
  • Resource: Estate planning 101
  • And more!

Invest in innovation

Growth is rarely linear. That's why OPTO helps investors to capitalize on innovation and burgeoning technologies before they hit the mainstream. How? Through meticulous categorization of stocks and ETFs based on the pioneering trends they represent, such as Artificial Intelligence, Robotics, and Blockchain. This strategic approach allows you to invest in innovation, early!


Friends,

Capitalism gets a bad rap. Much of it is deserved.

The biggest problem: short-sighted capitalism is a repeated disaster...for the public at large. Whether it's banks making risky bets or manufacturers tainting our drinking water, the dynamics are the same: the perpetrators get off scot-free; the public at large pays the price.

But that isn't always the case. If you want a shining example of what capitalism can be, it's Costco.

Consider how it plays out for all of the stakeholders:

  • Customers get access to goods they otherwise would pay much more for.
  • Suppliers are given a fair shake when it comes to prices (the company once re-negotiated with a supplier to pay more so that they'd remain sustainably profitable).
  • Employees love the culture. They get paid more than at rivals and have more of their healthcare expenses covered.
  • Shareholders have enjoyed 125,000% returns since the company went public in 1985 -- a rate of 20% per year.

How does Costco pull this off for shareholders? By ensuring membership fees are the bulk of profits.

The popular narrative is that success for any one of these groups is mutually exclusive. Any benefits come at the expense of others.

But it doesn't have to be that way. In fact, the blueprint is very simple.

  1. Mission: Figure out your core mission before taking on outside money. Provide maximum sustainable value for the minimum sustainable price. You give up short-term profits, but you become unassailable.
  2. Ridiculous Discipline: Once that mission is adopted, execute it...every minute, of every day, of every year -- for as long as you exist.

The problem: this is the least sexy blueprint of all time. It requires a management team to eschew greed and keep their eyes squarely on the long-term time horizon.

But as you well know, the long-term horizon is the only one where you can sustainably prosper. That's why we're happy to have you as part of this newsletter community.

Wishing you investing success,

- Brian Feroldi, Brian Stoffel, & Brian Withers


One Simple Graphic:


One Piece of Timeless Content:

Morgan Housel, the author of the bestseller The Psychology of Money, has spoken to hundreds of groups about investing & thinking long-term.

But his blog post, Overcoming Your Demons, takes a different turn. You'll hear about the 14 words that changed Morgan's life.


One Thread:

twitter profile avatar
Brian Feroldi
Twitter Logo
@BrianFeroldi
8:26 AM • Mar 10, 2024
412
Retweets
2922
Likes

One Resource:

Need an estate plan but don't know where to start? Check out this guide for the eight steps to building these important life documents.


One Quote:


👋 LAST WORD How are we doing?

We love hearing from readers and are always looking for feedback. How are we doing? Is there anything you'd like to see more of or less of? What aspects of this newsletter do you enjoy the most?

Just hit reply and say hello – we'd love to hear from you!

Cheers,
The Long-Term Mindset Team


More From Us:

📗 If you've read Brian Feroldi's book, he'd love a review.

👨‍🎓 The next cohort of our Valuation Explained Simply course starts in May! Click here for details.

🎬 Want a review of popular company earnings? Check out our YouTube channel! Last week, Brian Stoffel reviewed Crowdstrike's stellar results and covered why Sea Limited is investable again.


Long-Term Mindset

I teach investors how to analyze businesses. Each Wednesday, I share six pieces of timeless content that can be read in less than 2 minutes. Read by 100,000+ investors from a16z, Amazon, Google, Microsoft, and more.

Read more from Long-Term Mindset

View Online | Sign Up | Advertise Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better. Today's Issue Read Time: <2 minutes Lesson: 5 of the widest moat businesses we know Timeless Content: Why software is eating the world Thread: The best investor you've never heard of Resource: Finding your "Coast FI" number And more! Together with Finchat* Brian Feroldi's Portfolio Statistics Powered by Finchat I (Feroldi here) have used Finchat as my primary stock research...

View Online | Sign Up | Advertise Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better. Today's Issue Read Time: <2 minutes Lesson: Celsius & the importance of expectations Timeless Content: Why founder-led businesses outperform Thread: Warren Buffett's financial 'rules of thumb' Resource: Expectations for companies at 10x sales And more! Master Financial Statement Analysis Learn to read the numbers like a pro Warren Buffett. Peter Lynch. Terry Smith. David...

View Online | Sign Up | Advertise Welcome to Long-Term Mindset, the Wednesday newsletter that helps you invest better. Today's Issue Read Time: <3 minutes Lesson: Megacaps and AI Timeless Content: A wealth manager's personal holdings Thread: 10-K Diver explains cash versus profits Resource: Ramit Sethi's perspectives on diversified portfolio And more! Together with Incogni: Erase your digital footprint Like it or not, your personal data is more vulnerable than ever. There's an entire industry...