Cheap hot dogs
And big profits
Good morning, my hot diggity dawgs. This is your Stock Market Rundown for July 7th, 2023. Thanks for joining me. Let’s dig in:
TODAY’S TOP STORY: MEMBERSHIP HAS ITS PRIVILEGES 🌭
Sorry, Gold Star Members only: Costco is cracking down on people using mom and dad’s card. They’re IDing everybody at the checkout to ensure their dues are fully paid up before allowing them to purchase their gross of eggs, flat of wings, or or golf-ball-sized strawberries.
Poor Jaden will no longer be able to use my card when he’s bulking and wants to buy a Kirkland Frozen Lasagna the size of a coffee table.
Costco’s membership model and rock-bottom prices have made its stock a big winner long-term. Despite always looking “expensive” on valuation, it’s been a solid compounder.
Charlie Munger, Warren Buffett’s billionaire investing partner, famously loves Costco, and quipped earlier this year: "I love everything about Costco. I'm a total addict, and I'm never going to sell a share." Buying and holding is how 99-year-olds get their kicks.
In an example of “how you do anything is how you do everything”, the Costco hot dog has never had a price increase from a thrifty dollar-fifty. Founder Jim Sinegal once famously rebuffed an exec who wanted to jack it up: “If you raise the price of the fucking hotdog, I will kill you. Figure it out.” This is leadership, folks.
Another stock exposed to the shoppers in the aisles of Costco? TreeHouse Foods. TreeHouse makes store-brand products for not just Costco, but Walmart, Amazon, and Trader Joe’s. It should benefit from inflation-squeezed consumers trading down from fancy-schmancy name-brand products to cheap ‘n’ cheerful store brands.
Heck, why should I pay up for Bounce when I can get Kirkland Signature Fabric Softener Sheets for a fraction of the price? Though, I might regret it when the static cling has me leaving the house with a spare sock randomly attached to the seat of my pants.
SO WHAT ELSE IS GOING ON?
US government data shows Americans working full time from home work 2.5 hours less a day than those that head into the office. Mid-afternoon manicures and Netflix binges really put a dent in productivity.
Thank me later: a handful of unreleased Drake songs leaked to TikTok. 50/50 odds on whether these are AI-generated.
Top economist Ed Yardeni expects the US will escape an economy-wide recession: "The market likes to climb a wall of worry – it's great that so many people think a recession is coming." Remember what Uncle Warren said about being greedy while others are fearful?
Bond ETFs are bustin’ at the seams, having just reached $2 trillion in global assets. That’s useful information for when I’m a senior citizen and invest in bonds rather than stocks, but I’ll keep my seat at the slot machine for now, thanks.
Speaking of senior citizens, scientists say taurine, the stimulant in energy drinks, may boost longevity. Given how many Monster Energy drinks Jaden crushes during a Fortnite session, he should live to 99, just like Charlie.
And that’s a wrap on the week—catch you bright and early Monday morning. Yours in capitalism, The Axe