Economy

Warren Buffett’s Berkshire Hathaway sold $ 1.3 billion worth of Costco shares last quarter. Here’s why it’s amazing

“If you’ve been involved in such a business once or twice in a lifetime, you are very lucky.”

  • Warren Buffett’s Berkshire Hathaway sold its Costco position after investing 20 years ago, a filing this week.
  • The billionaire investor raised the shares of the big box retailer from $ 325 million in 1999 to $ 353,000 in June this year to $ 1.3 billion worth of shares.
  • The sale is a shock because Buffett has been popularly investing for a long time, with two Berkshire directors sitting on Costco’s board, and both Buffett and his business partner Charlie Munger have repeatedly praised the retailer.
  • “Once or twice in a lifetime you are associated with such a business, you are very lucky,” Munger said of Costco in 2011.
  • Visit Business Insider’s homepage for more stories.

Warren Buffets Berkshire Hathaway Revealed this week It pushed its shares inside Costco In the last quarter, it is out of the investment made 20 years ago. The sale is amazing for a number of reasons.

The investor’s firm grew from $ 325 million worth of $ 35 million in large box retailers in December 1999 to $ 1.3 billion in $ 1.3 billion at the end of June this year. Costco’s share price rose to $ 50 in the North and $ 300 in the North, which is about a 500% increase.

Many investors will be tempted to make money at the time, but Puppet has popularly stated that his “favorite holding period is forever”.

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The close relations between Berkshire and Costco add to the mystery. Charlie Munger – Buffett’s longtime business partner and Berkshire’s vice president who has been a Costco director since 1997, personally owns more than $ 60 million worth of shares as of last month. Display regulatory filing.

Susan Decker, another Berkshire director, also sat on Costco’s board and confirmed the close relationship between the two companies. Moreover, Buffett and Munger have received numerous compliments on Costco over the years.

Buffett said at Berkshire’s annual partner meeting in 2000. “We’ve had a lot of Costco for years. Charlie was there for it, but I exploded at it.”

At a meeting in Berkshire in 2011, Munger shared some of the reasons why hundreds of 0f members only praised the company for selling products in bulk at cheap prices through warehouses.

He said: “Costco is a business that has become the best in the world in its segment, and it has done so with a serious qualification and a serious ethical obligation to self-impose and send them to customers who will quickly accumulate all its cost benefits. Of course, this has created strong customer loyalty.”

“This is a fantastic business,” Munger continued. “If you’ve been involved in such a business once or twice in a lifetime, you are very lucky.”

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Puppet imitated Munger’s ideas by mocking his ally Costco’s rage with a fictional story that can be seen in its entirety. Warren Buffett Archive of CNBC.

“Charlie and I were recently abducted on a plane,” he said. “The kidnappers kicked us out as two dirty bosses who really should be hanged.”

“But they were a little embarrassed about it,” Buffett continued. “They really have nothing against us, so they said we would each be given a request before they shot us. They turned to Charlie and said, ‘What do you want as your request?’

“I would like to repeat my speech on the virtues of Costco with illustrations,” Munger replied, in Buffett’s words.

“Well, that seems very reasonable to me,” the kidnapper replied. “What do you want, Mr. Puppet?”

“Shoot me first,” Puppet asked.

Unexpected discharge

Buffett and Munger showered Costco with applause recently at the 2018 annual meeting. “I like everything about it,” Munger said, choosing the company’s cheap real estate, competitive and quality staff.

“Costco has enormous appeal in its constituency and they surprise and delight their customers,” Buffett said. “There’s nothing like that in business. If you’re pleasing customers, you’re far away from home.”

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Berkshire’s Costco status is not significant: Buffett’s held only 1% of the business in June and less than 1% of the total value of its portfolio.

However, Buffett and Munger have repeatedly praised Costco for more than two decades, and Buffett’s historical aversion to the retailer’s deep ties with Berkshire and the sale of high – quality reserves come as an undeniable surprise.

Thelma Binder

"Explorer. Devoted travel specialist. Web expert. Organizer. Social media geek. Coffee enthusiast. Extreme troublemaker. Food trailblazer. Total bacon buff."

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