Charlie Munger's Costco position
TL;DR
Charlie Munger held Costco Wholesale Corporation (NASDAQ: COST) shares from at least 1997 until his death in November 2023 — a 26+ year hold. He served on Costco's board of directors continuously over much of that period and famously called Costco "the most admirable capitalistic institution in the world." The position is the canonical example of Munger's "wonderful business held forever" investing approach — and a study in why long-duration concentrated positioning can compound at rates other investing approaches structurally can't match.
Charlie Munger's Costco position is one of the most-cited examples in modern concentrated value investing. Unlike Buffett's Coca-Cola trade — which was made through Berkshire Hathaway and disclosed via Berkshire's 13F filings — Munger's Costco position was held personally (and via Daily Journal Corporation, which Munger chaired). Its 13F visibility was therefore split between Daily Journal's filings and Munger's personal Form 4 / Form 5 disclosures from his Costco board seat.
The Costco board seat (1997-2023)
Munger joined the Costco board of directors in 1997 and remained on it continuously until shortly before his death in 2023. The board role created two parallel public-record obligations:
- Form 4 insider transaction reports — every Costco share Munger personally bought or sold from 1997 onward had to be disclosed within 2 business days via SEC Form 4
- Annual proxy ownership disclosure — Costco's annual DEF 14A proxy statement disclosed Munger's beneficial ownership of Costco shares
These two filing sources together create one of the cleanest verifiable trails of a long-duration insider position in the public record. Anyone can reconstruct Munger's Costco position by quarter from SEC EDGAR alone.
The thesis (in Munger's own words)
Across decades of Berkshire annual meetings, Daily Journal annual meetings, and various interviews, Munger described his Costco thesis in remarkably consistent terms:
- Member-loyalty moat — Costco's 90%+ membership-renewal rate created an annuity-like revenue stream independent of merchandise sales
- Pricing-power inversion — Costco voluntarily caps its merchandise margins at ~14%, passing scale economics to members rather than capturing them. This drives the renewal rate which drives the moat
- Operational excellence — Munger called Costco's execution "a kind of self-correcting positive feedback loop"
- Management quality — Munger cited Jim Sinegal (CEO 1983-2012) and the subsequent succession as exemplary of long-term-shareholder-oriented management
- Geographic optionality — international expansion (Mexico, Korea, Japan, Taiwan, UK, Spain, China) created decades of growth runway
Daily Journal Corporation's 13F position
Beyond Munger's personal Costco holdings, Daily Journal Corporation (which Munger chaired) maintained a substantial Costco position visible in its 13F filings from 2009-2023. The Daily Journal 13F is one of the most-watched quarterly filings in the value-investing community precisely because of Munger's direct involvement in its capital allocation.
Daily Journal's Costco position represented a meaningful percentage of its investment portfolio — often the largest single line item — across the entire decade-plus filing history. The position survived the 2008-09 financial crisis (Munger added during the panic), the 2020 COVID crash, and multiple Costco earnings-miss cycles. The hold-through-volatility pattern is itself instructive.
The return profile
Costco stock returned approximately 15-18% compounded annualized from the late 1990s through 2023 — well above the S&P 500's 9-10% over the same window. Munger's entry cost basis (split-adjusted) was in the $5-20 range across various purchase tranches; the position ended at $500-600+ per share when he died in November 2023. The mark-to-market gain over the full hold period was therefore in the 25-50× range, before counting Costco's dividend history.
Like Buffett's Coca-Cola, the trade's return came primarily from two factors: (a) extreme duration, (b) the underlying business compounding earnings at high rates over decades. Neither factor is replicable through short-horizon trading; both are visible only in the long-form public record.
Reading Costco filings post-Munger
With Munger's passing in November 2023, the question of what happens to his Costco position is now answered partially through estate filings and Form 4 disclosures of his successor trustees. Costco's board has a new composition; Daily Journal Corporation's portfolio is under new management. The quarter-by-quarter 13F + Form 4 trail will continue documenting the disposition of one of the most-watched long-duration positions in modern markets.
Our view
The Munger-Costco position is one of the cleanest examples in the SEC record of what concentrated long-duration value investing looks like in practice. The mechanics are simple — buy a wonderful business, hold it across decades regardless of macro noise — but the discipline required is uncommon. Most investors who claim to want to invest like Munger don't actually have the patience to hold a position through a 50% drawdown and add to it.
For HoldLens tracking purposes, Daily Journal's 13F filings remain available in EDGAR as the public-record trail of how Munger allocated capital in his last decade. Costco itself remains one of the most-cited positions across the tracked-superinvestor universe; many of the 30 managers HoldLens tracks have Costco in their portfolios. The Munger thesis articulated decades ago turned out to be transferable enough that other top managers independently arrived at the same conclusion.
The Form 4 insider trades + 13F filings that document this position are catalogued on our sister site: secfilingdex.com/learn/form-4 + secfilingdex.com/learn/13f.
Foundational reading on concentrated value investing
Munger's own Poor Charlie's Almanack is the definitive source on the framework that underwrote this position. Graham, Lynch, Buffett, Munger — the foundations.
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Not investment advice. Historical analysis from SEC Form 4 + 13F filings + DEF 14A proxy disclosures. Methodology.
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Six historical trades reconstructable from SEC EDGAR alone. Each essay traces the trade through 13F + Form 4 + DEF 14A filings.
Berkshire's 1988-89 KO purchase — $1.3B → ~$28B, untouched 37 years.
Berkshire's 2016-onward AAPL accumulation — largest equity position in firm history.
The $5B preferred + 700M-share warrants at $7.14 strike. ~$13B paper gain at 2017 exercise.
Scion Capital's 2005-2008 subprime CDS trade — ~489% net return.
Pershing Square's 2012-2018 multi-year activist campaign.
September 16, 1992. The single-day macro trade that broke the Bank of England.
2013-2016 long-side activism — public letter to Tim Cook, ~$2B realized gain.
See live tracked-manager holdings on HoldLens
Daily Journal 13F dossier — including the Costco position trail. Sister property cataloging every form variant: SecFilingDex.