A Real Life Philosopher's Stone
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Note: All dollar values mentioned herein are in millions of USD
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“Of all Elixirs, Gold is supreme and the most important for us. Gold can keep the body indestructible. Drinkable gold will cure all illnesses, it renews and restores.” - Paracelsus
Chemistry has a medieval ancestor known as alchemy, a field of study that pushed forward the scientific field quite substantially in between the middle ages and the 17th century. One of alchemy’s most sought after endeavours was the obtainment of the philosopher’s stone, a substance that alchemists believed would be able to turn base metals into precious ones, particularly gold and silver. In addition, alchemists believed that the philosopher’s stone contained physical properties, commonly known as the elixir of life, conferring longevity, bodily rejuvenation, and potential immortality to anyone that drank it.
Although the scientific legitimacy of this pursuit has been debunked (not writing it off entirely, our species is full of innovative creatures), it does highlight something engrained within the human condition, what I will denote as the “something from nothing” phenomenon. Within markets, individuals are often attracted to the loudest voices, buying into endeavours that are often too good to be true. Past frauds from the likes of Charles Ponzi to Bernie Madoff gripped the masses, fooling individuals that were intelligent on paper with promises of phenomenal returns across all time-frames. Even recently, the recent FTX debacle highlights the degree at which even the most supposedly sophisticated of investors (Sequoia, Ontario Teacher’s Pension Plan, etc.) were gripped by promises of riches, forgoing due diligence and succumbing to FOMO. In short, much like the philosopher’s stone, we all want to turn nothing into something. We are all enticed by the promise of being able to turn the invaluable into gold.
Being that as it may, sometimes someone does find a way to create immense value out of things that others would scoff off entirely. Copart is one of those instances. Copart turns junk into gold.
But how exactly does Copart’s philosopher’s stone work?