Costco's stock is up roughly 50% over the past year, which is the kind of number that makes people who bought index funds feel personally attacked.
The warehouse chain that sells 48-packs of muffins and $1.50 hot dog combos has quietly become a Wall Street darling, and nobody is more confused than the guy who just went in for paper towels and walked out $400 lighter.
Here's the thing nobody saw coming: Costco started selling gold bars online, and they reportedly move somewhere between $100 million and $200 million worth per month.
People are buying literal bullion from the same website where you can also grab a rotisserie chicken and a 10-pound tub of pretzels.
The stock's run isn't just about gold, though.
Membership renewal rates sit around 90% in the US and Canada, which is basically a cult that charges you an annual fee to get in.
In September, Costco raised those fees for the first time in seven years, and the market treated it like free money.
Analysts love recurring revenue, and there's nothing more recurring than a warehouse club that people refuse to quit even when eggs cost more than their car payment.
Costco trades at a price-to-earnings ratio north of 50, which is absurd for a retailer built on razor-thin margins.
Costco's P/E ratio is closer to a tech company than a grocery store, and bulls justify it with vibes, loyalty, and the fact that the hot dog price hasn't moved since 1985.
Bears point out that Costco's growth is slowing and that a 50% run in a year is the kind of thing that usually ends with a chart that looks like a ski jump in reverse.
But bears have been saying that for three years, and Costco's stock has made them look like the guy who brings a coupon to a garage sale.
The weirdest part might be that Costco's e-commerce business is finally growing after years of being an afterthought.
Gold bars, appliances, and whatever else people are willing to buy sight unseen are pushing digital sales up double digits.
It turns out the same people who fight for parking on a Saturday are perfectly happy to drop five figures on precious metals from their couch.
Costco is a retail stock trading like a growth stock, selling gold like a pawn shop, and keeping customers loyal like a timeshare presentation you actually enjoy.
If that sounds unsustainable, congratulations, you've been right for a decade while the stock tripled anyway.
The real lesson here is that American consumers will pay a membership fee, tolerate crowds, and buy gold bars from a company best known for $5 chickens.
Final Thoughts
If you can figure out what that says about the economy, let me know, because I'm still stuck on the muffin math.