A Burgeoning Growth Engine for Costco: Wanton Alcoholism

Costco has to be the single best retail business in the world. A new Costco just opened in area and I signed up for their ‘executive’ membership card, which is something that I feel wholly ridiculous — but I did so nevertheless.

In order to attain the privilege of shopping there, customers must pay an annual fee. In an era where every retailer is tripping over themselves to attract customers, this concept isn’t dually brilliant and absurd.

Their private brand, Kirkland’s, has also attained legendary status — viewed by many as representative of value and quality. A new engine of growth for Costco is now enjoyed in wine, beer, and spirits.

Last year, alcohol brought in $3.8b, half coming from bullshit wine. This business has grown by 46% over the past 5 years, outpacing food and sundries.

“Private label continues to grow as a dominant strategy in retail — especially when it migrates from being a ‘label’ to more of a ‘brand,’ which Kirkland has done,” said David Bassuk, managing director at consulting firm AlixPartners in New York. “Now it’s a well-known name and gives the consumer a perception of value and a good deal.”

The reason for their success lies in the perceived value. The company only marks up prices by 10-14% compared to industry norms of 25-40%.

“They’re doing the opposite of looking to cut corners,” he said. “They’re looking for maximum quality and minimum markup to drive value for the member.”

Other retailers like Whole Foods, Walmart, and Target have entered the private label business for booze too and have enjoyed success, thanks to America’s proclivity to drink themselves into stupors. Even still, Costco is widely regarded as the winner in this high growth space — clawhammering local liquor stores into a thousand pieces wherever they encounter them.

Both the stock and revenue/earnings trends have been steady eddy, in spite of an overall lackluster retail environment.

Ancillary beneficiaries are $STZ, $DEO and BF-b.

Happy pre St. Paddy’s day.

The last housing bubble was enjoyable. Housing stocks like $TOL and $HOV moved like internet stocks and the local real estate was rife with speculation — causing even homeless men to ‘play the market’ and become true players in the housing extravaganza.

You didn’t need any documentation back then and loans were given out freely, without a care in the world. I took out a mortgage with a home equity loan attached to it. I could do as I liked with the money — no strings attached — so I bought some Google calls with it and saw it expire worthless inside of a month. Losing the money was a minor set back. I didn’t care about money then as I do now. I viewed it as transitory, small little pieces of paper that could easily be reproduced at my desk by doing a few trades.

Commissions were gauche and I didn’t have an issue making as much as I wanted. It all was dependent upon the amount of time I wanted to work. If I wanted to make, for example, $40,000 for the month, I’d have to work part time. If I was in a particularly fond mood of making money, feeling competitive and entrepreneurial, I’d work full time and make over $100,000.

The housing bubble only fueled this carnivale like atmosphere. Some of my clients would take their money out to spend on beach homes they were flipping — always angling for the next score. Truth be told, I was too busy reproducing cash at my desk than worrying about real estate. Many of my friends were active players in the bubbling hot Brooklyn market and ended up making permanent wealth as a result.

So when I see the housing sector up by 3% for the day and $XHB ripping higher, I am reminded of the halcyon days of 2003-2007 when life was absurd and the economy was roaring ahead atop of a gigantic bubble.

I want those days back. I don’t give a shit about moral hazard and the fact that bubbles eventually lead to dark endings.

All endings are dark, friendo. Let’s get this fucking party started.

Sen. Rand Paul (R-Ky.) on Thursday shot back at Sen. John McCain after the Arizona Republican accused Paul of working for Russian President Vladimir Putin.

“I think he makes a really, really strong case for term limits,” Paul said on MSNBC’s “Morning Joe.” “I think maybe he’s past his prime, I think maybe he’s gotten a little bit unhinged.”

McCain made the claims Wednesday from the Senate floor.

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“He has no justification for his objection to having a small nation be part of NATO that is under assault from the Russians,” McCain said.
“The senator from Kentucky is now working for Vladimir Putin.”

The comments came after McCain asked for unanimous consent to set up a vote on a treaty on Montenegro joining NATO, but Paul objected.

Under Senate rules, any one senator can object to a unanimous consent request. McCain warned before asking for consent that any senator who objected was “carrying out the desires and ambitions of Putin.”

Paul said the U.S. military is already stretched thin.

On Thursday, the Kentucky Republican said there can be a “rational discussion” about the pros and cons of expanding NATO.
“We currently have … combat troops, in about six nations. We have troops actively just stationed in probably a couple dozen others,” he said.

“We have a $20 trillion debt.”

Paul said McCain’s foreign policy would “greatly endanger” the country and “greatly overextend us.”

“And there has to be the thought whether or not it’s in our national interest to pledge to get involved with a war if Montenegro has an altercation with anyone,” he said.

“Another argument is that, when you ask the people of Montenegro, only about 40 percent or slightly less are actually in favor of this,” he said, adding there are a lot of considerations.

“But to call someone somehow an enemy of the state or a traitor might be considered by most reasonable people to be a little over the top.”

The amount of grief taking place across the left side of America is intense. Their mental ailments have been laid bare and now they’re lashing out like savage animals because they didn’t get a second place trophy.

Last night Trump’s proposed a sundry of budget cuts, most of which hit liberal institutions that have become political and really shouldn’t be funded by the government. One of those organizations is PBS — home of Ernie and Bert.

Whether the proposed cuts will stick is immaterial at this point. Part of negotiating any deal is to first aim high and try to meet in the middle. Being that The Donald is a savant in crafting deals, I’m certain he’ll bend a little, especially when it comes to some of the cultural institutions that rich folk hold so dear.

Then earlier on today, the Twitter account for $MCD went rogue and attacked Trump. I do not believe it was hacked, even though Twitter said it was compromised. I think it was some malevolently by some retard managing the account.

On a related note, democrats are now threatening to defund the government by not raising debt ceiling — in an effort to stop Trump’s Wall from being built. Good thing the Mexicans are paying for it.

The past 6 months have been surreal. The Trump show continues to spin off hit after hit, weaving intrigue and endless amounts of entertainment for those paying attention to the details. The left have lost often and in hilarious fashion. Trump has been under attack from the moment he announced his candidacy and his thinned skin demeanor all but guarantees he’ll continue to give his enemies hell — even when they don’t deserve it.

There are innumerable benefits to this, especially from an investment standpoint — the first being he’s made the Fed almost meaningless. You know as well as I that if Trump wasn’t around creating all sorts of shit storms, we’d be hanging on every word coming out of the Fed heads. Do you remember when we’d know the schedules of each Fed head, even the non voting one’s, just so we could parse every word to get a better idea what they were up to? Now we don’t give a shit. If they all died in fires today, we might be sad, but we really wouldn’t give a shit.

All that matters now is the plans Trump has set forth: taxes, healthcare, regulations, budget and infrastructure. Life is simple again. The fuckers at the Fed have the cover they need to slowly sabotage the market and we can trade again — without having to worry about market crashes, induced by a Fed governor burp.

Demotards and republitards should both be grateful for Trump for being the lightening rod, the bigger than life super hero/villain (depending how you look at him), for us little guys trying to cobble together a few million in investment gains in order to finance modest lives in zero crime, golf course rich, suburban neighborhoods with pastoral views.