I agree, the "arguments" were interesting and certainly to some degree informative. More substance in the "bull" position too. However, neither position referenced much to the impact of the mess of the merger of the Price Cub/Costco Wholesale a few years ago. Just MHO that Cost took a long time to turn that squabble into profit and that is now well behind them and the future looks bright. Cost has, I think, a nice position in the institution market and if those managers think the PE Ratio is OK, then it is hard for me to disagree.
I also don't see how the "groceries" are going to overthrow or dominate the Costco concept ... the values are too strong, the periodic surprises are fun, seasonal products are always high quality, and people are in fact taking advantage. On A Sat., in late Sept., I made a survey of 4 of the 5 Costco's in the Portland - Salem area (Peter Lynch type DD??) and found the parking lots jammed to overflowing. Yes, that is just Portland but, I think that if others on this board were to "check out" the parking lots in other areas they will find as I have on many occasions ... Costco is just plain BUSY!
Lastly, on a "large ticket" item: My wife bought me a new watch for a 60th B'day a few months ago ... went to several jewelers and picked out a nice Baume Mercier for $3000 and the very Big Name store volunteered to discount it 10% down to $2700! A few weeks later I saw the same watch at CostCo for $1400, Dagburnit! ... But, that is part of the lure, you just never know what you will find when you go to CostCo ... frequently there are surprisingly big values!!!!
Mel |
