Charlie Munger is a fan of Costco. In fact, Costco features in Charlie Munger’s portfolio of just three stocks. In a Daily Journal annual meeting in 2017, Munger said that he’s comfortable with having a concentrated portfolio. He believes diversification is for investors who do not know anything about the stock market. So, what makes Costco such a compelling investment that such an astute investor like Charlie Munger would invest in them? Let’s look at the company’s business model to understand Costco further. Business model Costco Wholesale operates membership warehouses. You can get items in bulk at rock bottom prices. This place is not for the faint hearted. Snickers are sold in boxes instead of bars that you find at normal grocery stores. They also sell everything from apparels, electronics, furniture, jewelry, optical glasses, gas for your car — you name it, they got it. To gain access to deals...