This is similar to the FANG / Mag 7 debate. Defining the political shift catalyst is hard. It's a bit like pornography. You'll recognise it when you see it!
Biggest mistake ever to short luxury. Especially lvmh / hermes or kering. These are buy and hold & add on average hist pe. Hermes and lvmh have nothing to do with canada good or swiss watches numbers. Their brands are recession totally recession proof. Best businesses in the world. Family managed businesses with no debt. They are very very niche businesses in fact. additionally they are now trading close to mars 2020 hist pe. So great entry points.
They certainly have been that way for the last ten years. But my point was that was not the case from 1998 to 2008... but there is no question they are best in class
12.5% of LVMH sales are watches and jewelery, 48% of sales are leather goods and fashion so not sure about LVMH having nothign to do with Canada Goose and Swiss watches...
I think LVMH and Hermes have done a great job (like Ferrari) of making sure after market prices hold up well - turning purchases into investments.... the question is do people ever need to realise these investments????
The difference between Ferrari and LVMH is that Ferrari has REALLY restricted supply. Only 13K Ferraris are sold worldwide per annum. LVMH sells $38billion worth of clothes and handbags per year, it's very easy to see that dropping to $15 billion per annum in a bad recession... plus margin compression and price drops due to inventory builds.
True - but the Ferrari has significant storage costs as well. But LVMH - with so many different brands seems the odd one out compared to Kwichou Moutai, Hermes or Ferrrari...
True - cognac tends to be bigger in Asia. I drink both Bourbon and Cognac... but I would say when smoking a cigar, cognac is a better drink than bourbon. And you can drink the cheapest cognac and enjoy it no problem - not so true with bourbon...
Really tricky topic here. We have what some are calling the age of solipsism with the rise of Instagram and Tiktok making everyone want to show off on the Internet with fancy designer purchases, but you also have a rising socialist movement that you highlighted that is creating backlash against this sort of posturing. Between the two scenarios, it feels like a coinflip for which one will be more dominant going forward, which makes it really hard to have a view on luxury in either direction.
Dont disagree... I am just looking at election results and thinking the socialist view is winning - but politics can be a like a rohrshach test to be honest..
Interesting take. I think the rise of influencers and social media probably affects trends before 2011. Eg Cognac in the Americas is not the drink of choice. Celebrities like George Clooney, The Rock and Ryan Reynolds took market share with Tequila and Gin.
With access much greater to grey market luxury items too, it doesn’t seem as likely that there is a short for certain luxury categories, so finding the right one to short will be tough IMHO.
If you follow that logic though, the influencers are getting paid by those brands. If they aren’t getting paid by the brands (eg Hublot) everyone craps on them. So the answer is that the brands will have to spread the money around. If they can’t or don’t they are out of business either way.
From a subscriber.
https://www.cbc.ca/amp/1.7026692
This is similar to the FANG / Mag 7 debate. Defining the political shift catalyst is hard. It's a bit like pornography. You'll recognise it when you see it!
Or to paraphrase a famous economist, I see the pro-labour shift everywhere but in the stock market
Biggest mistake ever to short luxury. Especially lvmh / hermes or kering. These are buy and hold & add on average hist pe. Hermes and lvmh have nothing to do with canada good or swiss watches numbers. Their brands are recession totally recession proof. Best businesses in the world. Family managed businesses with no debt. They are very very niche businesses in fact. additionally they are now trading close to mars 2020 hist pe. So great entry points.
They certainly have been that way for the last ten years. But my point was that was not the case from 1998 to 2008... but there is no question they are best in class
12.5% of LVMH sales are watches and jewelery, 48% of sales are leather goods and fashion so not sure about LVMH having nothign to do with Canada Goose and Swiss watches...
I think LVMH and Hermes have done a great job (like Ferrari) of making sure after market prices hold up well - turning purchases into investments.... the question is do people ever need to realise these investments????
The difference between Ferrari and LVMH is that Ferrari has REALLY restricted supply. Only 13K Ferraris are sold worldwide per annum. LVMH sells $38billion worth of clothes and handbags per year, it's very easy to see that dropping to $15 billion per annum in a bad recession... plus margin compression and price drops due to inventory builds.
True - but the Ferrari has significant storage costs as well. But LVMH - with so many different brands seems the odd one out compared to Kwichou Moutai, Hermes or Ferrrari...
Who the hell drinks cognac? I’d figure bourbon to be a better gauge of American luxury beverage consumption.
True - cognac tends to be bigger in Asia. I drink both Bourbon and Cognac... but I would say when smoking a cigar, cognac is a better drink than bourbon. And you can drink the cheapest cognac and enjoy it no problem - not so true with bourbon...
Really tricky topic here. We have what some are calling the age of solipsism with the rise of Instagram and Tiktok making everyone want to show off on the Internet with fancy designer purchases, but you also have a rising socialist movement that you highlighted that is creating backlash against this sort of posturing. Between the two scenarios, it feels like a coinflip for which one will be more dominant going forward, which makes it really hard to have a view on luxury in either direction.
Dont disagree... I am just looking at election results and thinking the socialist view is winning - but politics can be a like a rohrshach test to be honest..
Interesting take. I think the rise of influencers and social media probably affects trends before 2011. Eg Cognac in the Americas is not the drink of choice. Celebrities like George Clooney, The Rock and Ryan Reynolds took market share with Tequila and Gin.
With access much greater to grey market luxury items too, it doesn’t seem as likely that there is a short for certain luxury categories, so finding the right one to short will be tough IMHO.
Yes - 2011 and 2013 was the best time to short the mass market luxury... and that market has been disrupted by new celebrity endorsed brands.
But if social media can push a brand up, social media can also push a brand down. Fashion and taste change
If you follow that logic though, the influencers are getting paid by those brands. If they aren’t getting paid by the brands (eg Hublot) everyone craps on them. So the answer is that the brands will have to spread the money around. If they can’t or don’t they are out of business either way.
So is there an asymmetric bet in Aston Martin? :)
Still thinking about it... been better to keep betting on Ferrari!