Nick Sleep’s insight was deceptively simple: some businesses become stronger by charging less, not more.
This runs directly against conventional finance logic, which assumes firms maximize profits wherever possible.
Deferred Gratification at Scale
Companies like Costco and Amazon deliberately suppress margins to:
Lower prices
Increase volume
Build loyalty
Widen moats
This creates a flywheel competitors struggle to match.
Importantly, this only works when culture, incentives, and capital discipline align. Most companies cannot resist the urge to harvest short-term profits.
Why This Matters for Investors
Scale Economies Shared delay gratification at the corporate level, allowing compounding to work uninterrupted for decades. This is not growth at any price—it is growth with restraint.
The Lesson
Look for businesses that could extract more but choose not to. That restraint is rare—and often invisible in quarterly results—but it is the fingerprint of enduring quality.
XTOD
“The big money is not in the buying and selling, but in the waiting.” — Charlie Munger
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