Business Breakdowns
· Matt Reustle
[00:00:00] S0: Absolutely. And I like the very holistic breakdown of that valuation approach too. That was extremely helpful to hear. This has been very interesting. You're instructing a lot of us again on a business that probably many weren't familiar with. We close these out with the lessons that you can take away, potentially apply elsewhere. Seems like there's a lot that could be applicable elsewhere from this one, but what would you say stands out the most?
· Markus Hansen
[00:00:00] S1: First and foremost, I love history. I'm a bit of a history buff. My son who's 19 now, he's heading off to college, recommending some books to read. Firstly the Sam Walton one's a great one. I just want to read about the ups and downs of retail, the business model, how he got there. Sol Price's book, if you can't get it, you can find some online reviews. It's definitely one worth reading. And it speaks to anyone from an older generation, and ask them about FedMart. And if you go online, you see the older club members who have the original card, and they talk about and laugh about it. But it is very interesting, this idea of the dynamic of a club. If someone had told you starting out fresh, you didn't know anything – you have to pay to shop here. You'd be like, I'll just go shop next door. But you do understand, if you pay, what you're getting on the other side. The whole concept is an interesting one, but a very interesting dynamic. So again, it's a reminder there are people who are able to come in and change industries in the way they look at it and set something up for others going forward. And like I said, Sol Price arguably influenced the likes of Home Depot and these other giants we know. So his impact or the impact of their ideas are very prevalent across the board. It ties in also with this idea I think of – the Europeans call it ESG, but very often, some of the greatest companies have also thought about their customer base in terms of their image, but also what they're bringing and adding to the community. And that's in a good way in terms of jobs, local jobs in terms of supply chains coming in. I think more and more if you look at the younger generation customer base, I know we keep saying they love their stories and stuff, but these are fantastic stories to follow. And very often capitalism gets a bad name. This is good capitalism. And I think that's important in an era where – I'm not being political here, but it gets thrown around, good or bad. America is a capitalist society at the end of the day. This is important to understand how these things can combine and work very well. The final part is, it's fun when you talk about these things. I have a bunch of friends who are from South America and actually, anyone you mention from the Caribbean, you know, anyone from – and there's a lot of people.
· Markus Hansen, Matt Reustle
I'm in New York, I mentioned PriceSmart. Big smiles, oh, my mother shops there. One thing I love about research is the anecdotal side. And with retail, It's great to do that. I mentioned how when I first went to Casey's, I went out, checked it out, took my son along. Actually, he's my test bed. Was out there playing hockey with his hockey buddies. Try the pizza, tell me what you think. Loved it. So feedback, yeah, good. Now they're doing chicken wings. He talks about it too. So you understand that, particularly with something like retail which is consumer touching, that core word of mouth marketing can be the most important thing. Above and beyond actually the product. And that still is very important. This is an area which, until we have robots going and doing the shopping for us, I know we have e-commerce, at the end of the day, most of us still like to go shopping to the supermarket. It's an event we do with families. This continues to be a key area where product, good quality for value, and yeah, look, supermarkets will still be around for a long time. Club stores are amazing. These are the kind of things I think you can tie in with just your daily life as well. So this is, who's the – I forget the name of the guy at Fidelity. [00:00:00] S0: Peter Lynch.
· Matt Reustle, Markus Hansen
[00:00:00] S0: Peter Lynch. [00:00:00] S1: Yes, Peter Lynch. It doesn't always work with everything, but this is one way you can experience the product, understand it, and start to see how it works. I think this falls in that remit. And like I said, this is an interesting one cuz I love learning about new countries, all the countries they're in. There's a lot, we know the names. I think a lot of people, for instance, after our conversation, will maybe go and check out Colombia. Colombia is a very dynamic economy, come a long way. Argentina used to be the big dog, and Venezuela. These guys are really developing. So it's pretty amazing. And so learning that, and if you go as a tourist, you'll see these things. It is interesting to see there is another part of the world. So we are big fans of global investing, international investing, looking for great opportunities that are similar to the great US peers. The US market's great, but there's other opportunities out there which mimic what we see in the US, and sometimes you can find them at valuations which are even more appealing. So adding that to your diversified portfolio is a great long-term compounder as well. [00:00:00] S0: I love it. This has been a pleasure again, Markus. I appreciate it and enjoy these conversations quite a bit. So thank you very much for your time and coming on. [00:00:00] S1: Thank you for having me, and it's always great. Thank you, Matt.