During periods of uncertainty, investors often default to first-order thinking and overweight what’s next. In these environments, attractive opportunities can be found by remaining focused on what a business is worth.
Nicholas Sleep coined the “scale economics shared” model to identify Costco’s long-term advantages. He later found it had even strong applications to internet retailers, betting big on an “overpriced” Amazon in 2007. In today’s digitally accelerated world his observations are finally being reflected among mainstream investors.