It's finally here. The highly anticipated, Apple
augmented reality, headset has arrived.
And in this episode, I'm going to be going over this headset
giving you my impressions of it as well, as many of the other
Apple announcements and other news as well.
So as always we have a lot to get into.
Now, they're calling this new device, this new AR headset, The
Vision Pro, that is the name. It was rumored to be the Apple
glasses or apple glass. It's the Vision Pro and this is
highly anticipated, something that we knew Apple has been
working on for years. And they finally got around to
releasing it. No more delays.
It is hair before I go into all the features and what I think of
the look and design and functionality and price point,
and what this means for apples future.
In fact, before looking at any of that, I want to go back and
revisit what's important to pay attention to as investors.
I'm not just an apple consumer. I don't just use their products,
but I invest in the company and that's primarily the way I'm
going to be judging these products with every investment I
have including Apple. There are long-term investments
in companies. Annie's that I think are
incredibly high-quality Apple. Being one of these that I've
owned for over five years, the gains in this company have been
significant. I'm up twenty two thousand nine
hundred dollars. Currently I've been extremely
bullish on Apple investing in the company.
When other people said that it was too expensive, or it was
slow growing because I looked at one key characteristic that I
knew was incredibly strong in this company and that is the
moat. The mo of the company is the
most significant. Deterministic aspect of any
investment and with apple. I have remained in the camp
where I believe apples moat is incredibly wide incredibly wide
and not only is it wide but it's always going in the right
direction. The mo is growing over time.
I've said apples moat was as wide as the ocean.
I would say it was as wide as the Atlantic Ocean.
Now it's becoming as wide as the Pacific Ocean.
The mo is already massive, but many new features that Apple
implements many new iterative Developments, that they do
further the size of their already, massive mode, and I
believe they've done that. Again, this year with this
developer conference, I see the mote ever-expanding for Apple
once again. I don't see any weaknesses here.
I don't see the mote shrinking between them and competitors.
I see them taking a bigger step into solidifying and growing
their ecosystem. So as we're looking at this
apple presentation, keep in mind, the moat and the
direction. This is going now, having said
that, let's take a look at the Apple Vision Pro headset.
We have it right here. It has a lanyard that goes to a
battery pack that you can put in your pocket and then it looks
like a whitehead set. A lot of people have compared it
to ski goggles or scuba diving goggles.
It looks like a VR headset. My impression of it is I don't
think there's any way to make these type of headsets look
super cool. So I don't think it looks
particularly cool but I also don't think it looks bad for
what it is which is a, a our headset.
In fact, out of the different designs.
I don't think this one looks particularly.
Really bad at all. It looks like a pretty
straightforward a our headset so you can criticize the design for
what it is, but it is a simple headset.
It does look like a pair of ski goggles, but this follows the
trend of every single Apple product.
They're typically not that much different than the competition.
It looks somewhat similar to the Oculus but it's all the little
differences that really add up to make an Apple product better.
For example, this one makes it so you can actually look through
the headset. It can become transparent which
is something notably different than the Oculus.
You can't really look through that.
If you're wearing an Oculus, you have it on and you can only rely
on cameras outside to see in front of you where as the Apple
headset, has this weird opaqueness that goes to
transparency. When someone enters the room
that something pretty unique. I haven't seen this anywhere
else. Now, early on in the
presentation, they show some basic features of a, our
headsets that were already used to being able to display
multiple windows and different things and apps in front of you.
Sort of like, a multi-monitor desk, Top set up, nothing too
special. There we've seen this already
with many a our headsets now. Apple is working their
ecosystem, making it integrate with the MacBook.
You can drag apps from your MacBook up into the sky.
You can view them right in front of you.
This is Apple leveraging their ecosystem, but again, this is
stuff that we've seen in other a our headsets apple is supposed
to be better, A step above all the rest and they can only do
this first announcement one time.
One thing that they announced, that seems pretty cool is 3D
audio and They call it spatial video so you can actually film
something in 3D and then re watch it in 3D, they mentioned
over and over again that you really can't see how impressive
this is on a 2d screen, but it looks incredible once you have
the headset on. That was something that I
thought was a bit more impressive.
Now, next, they showed off the movie portion of this.
Of course, you can watch TV and movies with your headset on.
You can expand the display to look much larger than just a big
screen TV. And what they showed here was
the cinema mode where you can expand it to make it look not
only like a big screen TV. TV, but like a massive
gargantuan IMAX theater with the huge retina displays at this
has. It's also supposed to be
incredibly high resolution. So as you're expanding it, it's
not supposed to be pixelated or look goofy.
Now, the presentation goes on and I think everything looks
good so far, but then we have a company that gets invited on
stage to show off their integration with the headset and
this is where I believe things got impressive, we have Bob Iger
on the Apple stage. What if all the things that we
thought? Thought were impossible were
suddenly possible, you could experience your favorite stories
in unexpected ways. Unbelievable places.
Could do more than just watch sports.
You could be at the game without leaving your home or be part of
the action, like, never before. What if you could travel on a
National Geographic Adventure from your couch, or if your
imaginary friends weren't quite so, Nari.
What if you could bring Disney World into your world?
What if you could become a superhero and seek the answer to
the ultimate question? What if Disney has a full
integration into the Apple Vision Pro?
And it does look impressive, just as this announcement was
happening. Disney stock, jumped two
percent. But ultimately, what Apple's
doing here is showing all the different various applications
of their new product trying to make it useful for as many
different audiences as possible. Now, the next part of this, they
go into the build quality design of the actual product and like,
you can expect from Apple, it's incredibly high quality.
In fact, it looks like they spared.
No expense Apple had the goal of installing Instantly making this
the number one talked about, number one hyped, a our headset
and by far the highest quality and with their build design,
they did accomplish that the surprisingly compact form
encapsulates. An extraordinary amount of
Technology displays cameras, sensors and even a high
performance computer all kept cool by an efficient thermal
design that quietly draws air through the system.
The design, of course, is highly customizable and Incredibly high
quality. Now, they go on showing
different. Actions of how it can be used in
education and Technology development, different ways to
visualize things. There's all different types of
applications, obviously for leading a our headset, so we
know by now that it's good, it seems really powerful.
The design seems incredibly high-quality the chip for its
custom design and Incredibly powerful.
It seems really good but then we get to the next part of this,
which is the price point for the headset and it's three thousand
four hundred and $99. You heard that right three
$1500. Now, all say that, I'm what a
lot of people consider to be an apple Fanboy.
I really like their products. I like what Apple does, I always
think that it's at the top end, they make the highest quality
stuff. But when you come out with a
product, even one like the headset and you make it above
3,000 dollars, that is incredible.
That's incredible. That is so much money $3500
after-tax. You're paying close to thirty
seven hundred dollars for It just incredible what they're
actually asking for this headset.
That was much higher than my expectations.
I thought it would be somewhere in the mid-2000s maybe two
thousand two hundred dollars. I could see it around there.
But thirty five hundred dollars is a lot of money.
In fact, the put that in perspective $3500 is so much
money that that's how much I spent on my completely upgraded,
specced out, new Macbook Pro. That I use to run this YouTube
channel, to edit different videos too.
Do a ton of business work on. That is my main daily driver,
that's a Workhorse. So you're comparing this headset
to one of their top end computers.
That's the price point. They have a tad.
Now, when I think of Market fit and who this product could
possibly be advertised for, it's certainly not the average
American, the average American their household income is around
70 thousand per year. That's just normal.
People making 60 to 80,000 per year, working your career.
A job to spend three thousand five hundred dollars on a
headset. Like, this is a major major
investment that would take months of saving for the average
person. So this rules out, 90% of
Americans right off the bat. So, you have a very small
minority of people, making this amount of money that are willing
to dish out $3500 for something. That's pretty discretionary, not
something that they have to have.
The only people that are going to be buying this in the median,
household, income are going to be people.
All that are huge enthusiasts of a are some people like this type
of stuff more than they like a nice car.
More than they like different forms of entertainment or
travel, they'd rather buy this. So to that Niche group, this is
going to be something, they save up for and that they're willing
to dish out some serious money for.
But that is a small group of people that isn't every single
person like they're trying to Market with with the iPhone.
Apple has priced this out of the majority of Americans when I
look at the other group that this product Would appeal to I
think there's a couple different categories.
There's the enthusiasts, there's the Educators I think this
product will be used in universities and schools to show
3D modeling and displays to their students.
So I think this will be a very popular item amongst Educators
and then there's also the developers developers will want
to buy this item, they'll write it off as a business expense and
they'll use it to develop apps and get a head start on when
Apple comes out with another AR headset.
That's at a more palatable price.
Point. So we have a niche group of
enthusiasts, we have Educators and we have developers and we
have anybody that falls into the incredibly High income category
that has a lot of discretionary income as well.
To some people $3500 is not a lot of money so they could pick
up one as well. But this misses out on the huge
Market that Apple typically goes for Apple doesn't want to carve
out some niche market where they can only sell to a very small
group of people. They want to sell to as many
people as possible and what I believe they'll do over time.
Is what they've done in the past.
They initially release a device like this, with the initial aim
of having it be impressive and showing off the wide
capabilities. That the item is able to do.
This is almost like a ongoing advertisement for the new
category. They show the power of what
Apple has designed and they eventually release a lower-cost
version of it that more people are able to afford.
They get to that point. Once they've gone through the
initial release phase, so the Vision Pro, a our headset right
now is not going to be a big game changer for Apple.
It's priced at a point where the majority of Apple customers are
unwilling to buy it. They're simply not going to pay
for it and apple is aware of that.
I believe after this initial phase the initial release going
through a year of iterative development and feedback, they
will make it more accessible based on their feedback in terms
of timeline. I believe they're going to go
through this initial phase at this High entry price point.
And then the next versions of this will have different price
points. Some of which are much cheaper.
That's when Apple I had to really push it to the
mainstream. Now having said all of that with
all of the discussion, we're going to get around this Vision
Pro headset. I want to restate one fact that
I think is significant my investment in the apple and my
thesis on this company has never once been reliant on the Vision
Pro or apples. A, our headset being a success.
Another way that I could State. This is, I believe that Apple
will be a very attractive good investment.
Even if the Vision Pro is an utter disaster.
A complete failure, even if that happens, is Company still a good
investment, The Vision Pro and the Apple car.
Those are potential growth paths.
By Apple has, so many other avenues of growth, they have so
many other levers to pull the monetize, their massive customer
base and you can see them doing that.
And again, when looking at this, we focus on the mode.
Let's Take a look here. First of all, they announced a
new Macbook Air a 15-inch one. This is probably the most
important device for normal users.
Normal users of MacBooks. Do not need a They need the air.
It has all the computing power, they would ever need and now
they have a 15 inch version of it.
So, I think that this will be an incredibly good selling product.
It has all the things that you would expect from Apple.
It's then it has good speakers, but they also mention the Apple
M2 Chip, they decided to mock. Intel, just a few more times.
Comparing it against the first Intel Chip saying that.
It's now 12 times faster. No wonder, they continually brag
about their performance in comparison to Intel Apple also
and their chip creating Endeavors created.
The M2 Max, which is another Ultra powerful chip.
They have it as the most powerful Apple chip currently,
they decided to slap that chit in the Max studio.
That's the little. It's like the little dock, the
little Hub, that's an actual computer now and the thing is
incredibly impressive and they mention things that seem
completely absurd. Like, it can hook up to 22 8K
streams at a time. Apple is still making the most
powerful computers for design for editing for audio for all
the different Endeavors that professionals do.
And they show that often illustrate.
That once more hair. They also brought back the Mac
Pro. The Mac Pro is a beast of a
computer. Nobody should be buying this for
a simple personal use. It has stuff like 192 gigs
unified memory. These specs are completely
outrageous and it comes along with that typical outrageous
price point, seven thousand dollars for that device.
Again, these are used mostly for professionals companies, buy
them as business write-offs. Now, as I'm watching this again,
I'm asking myself as Apple's moat getting wider.
Or is it shrinking in my judgment every single time?
I see them come out with leading devices, which are the best in
their given category. I believe the mo is widening for
this company. I think it has a stronger mote
today than it did yesterday. The company continues to
iteratively develop and stay ahead of the competition in both
their chip, making their design, the cohesiveness of their
products and the power of them. Now, I think that Apple's
Hardware division is second to none, they make Hardware, that's
better than any other competitor by far.
But I think what actually gives Apple the most significant moat
is their integration of their software into their Hardware.
Forming, what is called an ecosystem?
Describe the Apple ecosystem, I want to reference a video.
I did back in 2019, this was four years ago, talking about
Apple's mode. In this video, I described apple
as a tent in the ground. Pretend that you're going hiking
out in the woods and you have to stake down a tent.
You're going to be hiking and setting up camp in a place that
has severe wind gusts. 20 30 mile an hour wind gust.
That is the competition that is capitalism.
There is always someone trying to take your mode away.
Someone trying to steal the economics of your business.
And what Apple does is they put down a lot of steaks.
The stakes in the ground are the ecosystem of the company.
You have one steak which is the iPhone.
Then you have another one, which is the MacBook, then you have
the iPad. You have the Apple watch, you
have all the various Hardware products, but then you have
other things that they're trying to address.
Add into their ecosystem, more Stakes to keep their users set
in stone so that they don't leave to a different operating
system. They introduced different things
like the Apple savings account. That's one more thing to keep
you staked into the Apple ecosystem, they added in
iMessage, they made it so that I message worked better with other
Apple devices than it did with Android.
That is another stake in the ground to keep you in the
ecosystem. The same with apple photos, the
same with apple wallet. Now, of course, there's other
companies that try to do the same thing.
They try setting up a tent, but unfortunately, they don't have
as many stakes in the ground. So, when competition comes, they
end up getting blown away. This is Intel a company that
simply does not have the same moat and ecosystem of apple.
As soon as someone came along and made a slightly better
product, Intel stock price, got hammered, so you're looking at
companies here and gauging, how did they keep their customers
long-term with apple? This is always been a point that
I focused on. And what I see is them.
Tingly adding in more and more steaks and some of the biggest
Stakes, they just recently added in our regarding the phone app
and messaging. They added in some cool
features. Like now, you can have an image
of someone calling you to make it more personalized.
This isn't exactly a huge competitive Advantage.
Other companies can do this as well, but it's a fun little
feature. They added in collocate, so you
can now have live voicemail transcription.
You can see what people are saying.
As they're leaving. You voice messages and then you
can decide then to pick up. This is a feature that I really
We love because I do not answer calls of unrecognized numbers.
But again, these are flashy features but I don't think
they're massive stakes in the ground.
These features in and of themself, I don't believe really
grow apples mode another feature.
That's cool and it adds to the Apple ecosystem slightly is
leaving voicemails that are now video messages where I believe
that Apple has the most to gain from their ecosystem Advantage
is in messages. This is already been highly
debated, but apples messages creates an Crowd.
Once you're part of that and if you're an Android User, you are
on the outside. Apple users have different
functionality. Android has the green bubbles
that come in slowly, and they seem disjointed from the
conversation. And Apple has used this to their
advantage, knowing that it is a massive part of their ecosystem.
It is one of the big stakes in the ground that keep people on
Apple's ecosystem out of Androids, and they've added in a
lot of specific functionality like this new check-in feature.
King it so that you can tell people when you're going to
arrive and they can get specific information on your traveling.
So they know right? Where you are that feature does
add to the Apple ecosystem. It's another stake in the
ground, but it's not as significant as this new one.
This new one, I believe, is a much overlooked feature.
People are just going to look at this and kind of scoff at it and
move on to the next thing. But I believe it's one of the
most significant updates in this entire developer conference.
It's called stickers. Here's what Apple stickers are.
Let me show it to you. By tapping the plus button.
And then tapping stickers, you'll see the brand new drawer.
That brings all my stickers into one place.
Like my recently, used stickers from emoji and any sticker
packs. I've downloaded and we've made
all the Mochi into stickers. I can peel and stick an emoji
sticker. And I can rotate and resize it
to You can literally grab a sticker from the tray there at
the bottom, you can drag it to wherever you want on the
iMessage feed, even in group messages.
And then you can twist and expand it to different sizes,
specifically on the messages you want.
And this is something that a lot of investors.
Don't give enough credit to having these seemingly
insignificant almost frivolous. Social media functionality is a
big deal. People use these all the time.
Look how popular memes are. Look how popular emojis are.
Look how popular social media is within messaging.
Expanding this toolkit of user messaging is significant, people
want to be on the In Crowd and to do that.
You have to own an iPhone. Best of all, you can now react
to messages by adding stickers directly to any bubble from the
tap back menu. And the fun doesn't stop in
messages. We've added stickers system
wide, so you can access your full Sticker Collection in
markup and anywhere you can access Emoji today, including in
third-party apps. I believe that this feature may
be overlooked by most, but it is a massive feature.
It brings Apple closer to competing directly with social
media companies because you have more ways of expression and
social media right within apples ecosystem.
And there we have yet. Apple putting another stake in
the ground, holding their tent down and increasing their mode.
Now, one interesting thing about this entire presentation is
Apple really didn't mention a. I at all, they mentioned
slightly some machine, learning some language.
Modeling when it came to autocorrect that was where they
really mentioned that, they're using a lot of machine learning.
But that was basically it and they didn't repeat the term aii
over and over again. Apple knows that most people
don't really care all that much about AI.
All people want is something to work really well, and that's
what they focus on the end-user affect.
A lot of companies are focused on trying to boost their stock
price and show how involved they are on the latest thing.
Apple focuses on what users want apples trying to put more.
Stakes in the ground by having a new Journal feature, where you
can Journal out your entire life and tie it into videos,
timelines Maps photos, everything who knows, how
successful Journal will ultimately be, but this is
another way to keep people tied into the Apple ecosystem.
If you start journaling an apple, that's One Less Reason To
Leave Your Journal halfway through and switch to an
Android. And when it comes to, what I
believe is the weakest part of this presentation, I think I'd
have to give that to the iPad portion.
All they really said, is that they're making new widgets, and
they have A new home screen that I don't think is particularly
all that great to me, the home screen, just looked like a photo
with the time on, it doesn't seem like anything.
That revolutionary nothing really to get excited about.
It didn't really change my opinion, one way, or the other.
In a more exciting announcement. Apple did have their new Mac OS,
which is Sonoma apples, working on changing the widget drawer,
which I honestly believe is a very weak point of the operating
system. The widget drawer just seems
messy and cluttered I might use it for a couple apps like the
weather app. So I do like what they're doing,
trying to improve that aspect of the Mac.
They announced a new toolkit for game developers to be able to
develop upon them. This is a weak point of Apple.
Most people do not buy their devices for gaming purposes and
they're really trying to get into this category.
They want to make it so that their devices can be called
gaming devices. But I still believe they have a
long ways to go to be able to accomplish that, but I think
they had more significant announcements when it comes to
Safari Apple wants you to use Safari.
They want you to move from Google Chrome into Safari when
you're using. Devices.
They've improved the security of it, making it so that it
actually locks Incognito Windows after browsing if left on idle
and they added in a new password manager, there's an entire
category of product. And fact, a lot of companies use
subscriptions to different products that are entirely
centered around managing passwords.
In fact, a lot of companies charge anywhere from four to
seven dollars per month, just to manage your passwords and even
more money to manage your family passwords.
Now, apples building out a tool that could potentially Replace
those type of products. The Apple password manager that
works with your entire family. Now, all of these features again
seem minor but they add a little bit to the Apple ecosystem and I
still think there's a decent chance to Apple can continue to
take market share from chrome into Safari now.
Moving onto the watch. They announced a couple new
features here. One's a new way to measure your
overall health and strength. When doing exercise, which is
something that I really have never heard of until now using
power heart rate and Motion data Apple watch will estimate your
functional threshold. Power known as FTP which is the
highest level of cycling intensity that you could
theoretically maintain for an hour.
That doesn't seem like a huge game changer, but it does seem
interesting. The other thing that they went
on and on and on about with the watch was hiking, this is where
they made a lot of adjustments. I don't know how big the market
is for hiking, but it seems sizable enough for Apple to
focus on it for a decent on a time.
They Have trailheads, they now have different map locations.
They now have different heights for your hike so you can see
your altitude and the expanded this into work out apis where
now you can use the Apple watch to do even things like improving
your golf swing. All of this stuff was cool, but
it's not a game changer. These aren't things that are
really going to move the needle all that much.
With the Apple watch people that already have their mind made up
on it are likely going to be unchanged by these additions.
The big thing that Apple still needs to develop in their watch
is the glucose monitoring. And that would be a massive Game
Changer. Of course, they don't have it
yet, they didn't announce it here.
Now, the presentation went over a lot of different things in a
lot more detail, but that's basically the gist of it Apple
added, in more stakes in the ground.
They widen their moat and they announced the new feature, which
is the AR headset which is going to be sold to a very Niche
audience to start because of its price point.
In terms of what investors are going to be the most
disappointed of, I believe it's going to be the headset price
that's going to get the most negative attention, who will
ever be able to afford that headset.
Looking at it long term, I don't think that's a problem.
I think Apple will come out with more affordable versions down
the road outside of that, Apple Still Remains with an incredibly
wide moat, which should be the central thesis for owning this
company. You can try to look at next
year's earnings and next year's PE ratio, but that really hasn't
been the best gauge a couple years ago.
Apples P/E ratio was 20 to 25, the company remains around the
same and the stock has been up 100%.
So Apple has grown cash flows much, much faster than the
market. Anticipated for me.
Apple Still Remains a hold outside of Apple.
There's one other company I want to talk about in my portfolio
that recently reported earnings and this entire category of
company has been doing terrible recently.
It's the retail category. So in my consumer pie, we have
CostCo right here. And this is the only physical
retailer that I own. I don't own Lowe's or Home
Depot. I don't own Target.
I don't own Ulta. I don't own Dollar General or
any other retailer. I decided to pool all of my
money. That would go into retail and
put it into Costco, and this is frustrating for a lot of
investors because Costco stock has been doing really well and
the stock price never seems to drop.
Even though the company is optically, expensive cost, goes
up, 14 percent. Year-to-date the company's done.
Okay, it's beat the S&P 500. So far this year Target on the
other hand is down 14 percent. Year-to-date Dollar General.
Generals down a staggering 36 percent.
Year-to-date Ulta is down 10 and a half percent year-to-date.
And then we have Walmart which is holding up better, but it's
still only up four percent, year-to-date lagging behind the
major index. So why is Costco doing so much
better than other retailers. I don't believe that this is a
result of happened chance, or luck.
The reason that Costco continually does well, is
because of its results. The company has continually
operationally good results better than other retailers and
their specific reasons specific things.
Do that drive those results. All of these companies have to
deal with something called shrinkage.
And what we're talking about here is not the type of
shrinkage that's popularized by Seinfeld.
The women know about shrinkage. What do you mean like laundry?
No. No, that is not the shrinkage.
We're talking about hair. Shrinkage is a term used in
retail to describe product loss. Losing out on valuable
merchandise. Either through employees
stealing it customer stealing it, or it's simply being lost in
transit. This has been such a massive
issue in the retail category that it's hitting the bottom
lines of these companies. Luckily, we can take Dollar
General. For example, here's the CEO on
the earnings call and he describes a problem, they're
having these were partially offset by an increase in shrink.
Markdowns, and inventory, damages, as well as greater
proportion of sales coming from consumable categories, right
there, he mentions that they're seeing an increase in shrink
products being stolen or lost. Now we have the Target, CEO, and
their last earnings call Beyond safety.
Concerns were standing shrink rates are putting significant.
Are on our financial results, more specifically based on the
results we've seen so far this year, we expect that shrink will
reduce profitability by more than point five billion dollars
compared with last year. He just said, that product,
shrink is going to impact targets, bottom line by 500
million dollars massive impact from shrink.
And while we're doing everything we can to address the problem,
it's an industry and Community issue that can't be solved by a
single retailer, that's why we're actively.
Ting with legislation law enforcement and retail industry
Partners to advocate for Public Policy solutions to combat
organized. Retail crime.
People are going into targets and stealing products, whether
this is Target's fault for having a messy store having
items off the shelf not having good security.
Or it's a product of the communities that they operate
in. The bottom line is investors
profits and Target are being robbed by thieves.
Walmart said in their last earnings, call on shrink it is a
factor. And we've said in the past, It's
been challenging for us. It's been challenging really for
all of retail. So we're going to actively
manage this issue. We always do we always have and
we're going to continue to take steps that are reasonable and
required to make sure we're protecting our customers and
protecting our Associates and protecting our assets and
inventory. We know a lot of communities
have been affected by this but it's also important to note that
retail can't solve this issue. All on its own it will take
communities stepping up and enforcing laws That are able to
bring the issue back under control.
Walmart has a huge problem with shrink Ulta set in their last
earnings call. Now, similar to what other
retailers have shared, we continue to see pressure from
inventory, shrink this quarter. And we have updated our
full-year guidance to reflect the Persistence of this trend
while shrink is a result of various factors theft
specifically organized. Retail crime, especially as
we've seen a rise in violence and aggression during these
incidents, our first priority is the safety and well-being of our
It's and our guests. We are committed to ensuring a
safe working environment and investing in fixtures training,
support and structure to increase Staffing and security
to aggressively address this concerning Trend.
All of these companies are dealing with shrink, in many
cases. It's violent criminals going in
and robbing these stores, but then we finally have Costco's
earnings report call. This is what Costco had a say
this last quarter. Our shrink is intact.
We haven't seen any major change in trinka JH.
It fluctuated a couple of Three basis points up, really before
covid, as we rolled out self checkout and since then it's
come back down a little bit. And so it's been a very tight
range and we've been fortunate in that regard while every other
major retailer is worried about the safety of their employees.
Talking about violent, criminals and increase in Theft Costco
says that. There's literally been no
change. They don't mention any violent
incidents. And they don't mention any
change in shrinkage. Now, how could this be?
What could make Costco different than the rest of the pack?
Well, I have a couple simple observations that I think
heavily impact, why Costco stands out from the rest.
The first is a simple layout of their story.
If you go to a Costco, you notice they have two basic
doors. One of them is the entrance and
the other one is the exit. They check all receipts at the
exit. So it would be very difficult to
steal from a Costco. You'd have to sneak by the
receipt Checker. If you did that, they would
track down who you are through the camera, and they would ban
your membership. So you can never buy.
Something from Costco. Again you would never be allowed
in the warehouse ever again a punishment in my opinion that
would be worse than jail time but the receipt checking is not
the only thing that mitigates theft and Costco's.
The other aspect is everything they sell for the most part is
huge, its massive, large quantities big boxes.
This would be difficult stuff to still consider the logistics of
trying to really still anything from a Costco.
Can you really sneak out of the store with one of these boxes?
Can you really go unnoticed loading?
Things in the car you might be able to but it would be very,
very difficult and thieves realize this.
They're looking at potential victims of theft and they go to
the easiest victim possible. Costco is not the easiest
victim. The only Thief that goes to
Costco is one that wants to make things a lot more difficult for
themselves. And then finally, the last
aspect that I'd highlight is a major reason that Costco's
different from all of these other retailers is their
membership. Based system.
Most retailers, you can go in and just buy a A gallon of milk
if you want but the way the Costco initially made their
business was focusing on which customers, they did not want,
not which customers they did. Want Costco didn't want just
anyone to be able to shop at their business?
They wanted loyal customers that pay a membership for the
privilege to be able to shop in their warehouse.
If members are not willing to pay that membership, they're not
able to shop at Costco. This in and of itself is a
natural filter against criminals.
They're far, more likely to go to places where they don't have
any The membership base, the ones that they do.
So when I get questions about other retailers, whether it be
old te or Dollar General or Target, or whatever, retailer
has recently sold off the questions of whether or not I'm
going to buy it is likely. No, I chose Costco because I
think it's Superior to these other retailers.
Now that's going to be it for this episode.
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