Latest / The Curve / RTC27: This stock has delivered nearly 300% for the past 5 years

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RTC27: This stock has delivered nearly 300% for the past 5 years · The Curve

• 0:00
  Welcome to season two of Raising the Curve, a conversation for women who want to
• 0:06
  learn more about money, via money. For the future they want to have. The pursuit
• 0:11
  for financial confidence and increasing your wealth should be a simple one. So
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  this is a place for you to learn about investing in finance in a non-scary or
• 0:20
  intimidating way. Thank you for being here and for listening. Because together
• 0:25
  we really can raise the curve. Hi, that's her booster and she looks like she's
• 0:32
  about to fall asleep. I feel like I hung over. Not girls. I've not had mine yet but I
• 0:37
  had a nap just before coming here and it was just the worst idea. You know
• 0:42
  sometimes a nap is just exactly what you need and you're like oh I'm really
• 0:45
  detected today. Have you ever had a coffee then had a 20 minute nap and then you
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  wake up and you get there. No, it's a happy hit and it's like it's successful. Yeah.
• 0:55
  Okay, but maybe not for you. I feel like when you have coffee alone you're just
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  like scary. Yeah. I'm really excited. They got you a full strength coffee
• 1:03
  and see what you have and your hands were shaking. I had to remember once I
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  or the same thing happened. I was in when I was in Sydney and I had to pull over
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  on the side of the road, get out of the car, sit down on the grass and have
• 1:14
  some like deep breaths because I felt so anxious. It's like a little kid that's
• 1:19
  head sugar for the first time. Yeah. What's happening? I can somewhat self-regulate
• 1:24
  now but just probably won't be having coffee then nap. So what are we talking
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  about today because I've tried asking several times if it's like it's a surprise.
• 1:34
  Wait till we're in this studio. Well I can let the cat out of the bag now. What are we talking about?
• 1:41
  Drambol. We're going to do a stock story. Oh yay. Yeah, you're out. Yeah.
• 1:46
  So watch what company are we talking about. So this is one that we know very well. Is it
• 1:52
  Microsoft? No, I knew I'd get that reaction. I invited Microsoft. The amount of people
• 1:58
  say to me, gosh, it really loves the Microsoft stock. Does it is anyone else in the
• 2:03
  industry as enthusiastic about the Microsoft stock as you are? Well obviously a ton of people
• 2:07
  because the share price is going up. So how much is one stock? Sorry, sorry. One moment we'll
• 2:15
  just do a quick Google. 300. I should have known this. Three hundred and eleven dollars right now.
• 2:20
  It's quite high. Yeah. And it's going up. Yes. Good to know. Anyway, sorry. Back to the day.
• 2:27
  So can you give me some clothes thing? What industry is it in? So you've drunk tequila.
• 2:32
  Not. Coconut tequila. My favourite. No, close. It is an alcohol. Well, I really want to guess it.
• 2:42
  We have it at Arvins. First. Yeah. Well, the peanut coffee. Moe, Hennessy, Louis Vuitton.
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  Other way around. But I remember you said this is one of the most, the person who owns this
• 2:56
  owns a huge amount of stock, right? Yes. And it's one of the more successful stocks. Did you
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  say in history? Did I just make that up? It is. It is one of, yeah, it's got a fantastic
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  track record. So it's for those that don't know, it's actually the world's largest luxury goods
• 3:12
  company. So it's got about a four hundred billion dollar market cap. What is a market cap?
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  So that's when you take all the shares and you times it by the share price. So say you had your
• 3:23
  share price was three dollars and you had a million shares. Your business would be worth three
• 3:27
  million dollars. Is that how you value the company though? Yeah, that's the valuation of the
• 3:30
  company is the market cap. Okay. Yeah. So the market cap is the size of the company really.
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  Because when the share price increases, if shares don't, your share count stays the same,
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  but your share price increases, which means the value of your company goes up. Does that make sense?
• 3:45
  No. So let's say I owned a company and had a million shares,
• 3:50
  yeah, available to the public and the shares were trading at three dollars and then for some reason
• 3:58
  business business didn't do too well. That's those shares are now with two dollars. My business
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  is only with two million rather than three million. So the market cap, it's called the market
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  capitalization of a company is the number of shares available to the public times the share price
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  and that's the size of the company. So to put that in perspective, the market cap of
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  Microsoft is 2.3 trillion and LVMH is 400 billion. Yeah. So it's yeah. And like Catman do is like
• 4:29
  700 million. So how many shares would they have? Would you, so you would take that amount?
• 4:34
  Yeah. You would divide it by how many shares there are and that's how much
• 4:37
  the share price is? Yes. Yeah. So if you had the market cap and you want to
• 4:42
  figure out how many shares were available to the public, you could divide that by the share price
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  or if you only had the share price and the market, then you could, you know, you can use
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  country. Yeah. So is that what a company would sell for be valued at or is it just a term that
• 4:57
  you use to kind of explain the overall value? But it's not necessarily what it would sell for.
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  It would sell for more than that. Okay. Yeah. Because shareholders are a bit like, well why would I
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  sell to you? I want to sell to you at a premium. So therefore you always hear about takeovers
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  or companies being bid for it like a 20% premium to the share price or a 30% premium to the
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  share price or whatever because investors need to be compensated for what you're going to miss out
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  on in the future. So yeah. It's a comparison to other to compare to other companies as well.
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  So we're talking about LVMH. Yes. LVMH and are we going to go through the five criteria?
• 5:35
  Yes. Yeah. But I'll just go a bit over you because some people might not know.
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  I don't even really know what they're even on to. So they are a French company and they were
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  founded back in 1987. So 34 years ago. That was good math. Yeah. Well, surely had that written down.
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  It's just like a 33. Yeah. Yeah. And it was when they merged Moe, Hennessy with Louis Vuitton
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  as the name suggests. Oh, so there was two companies. Yes. Yeah. And they merged together. So they
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  actually have 75 brands under LVMH. Ooh. So they've actually got six pillars, which kind of
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  makes it easy. So they've got wine and spirits. So they've got Moe, Hennessy, Moe under the
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  air, Dom Perillon, the then they've also got the fashion. So they've got heaps of under the air,
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  but those are just a few. Then they've got fashion leather goods, which is obviously Louis Vuitton.
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  They also have Celine, Kenzo, Gavinci, Dior, Mark Jacobs, Fendi, like all under the one. Yeah.
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  Crazy. Yeah. Wow. You really, it's so like from a like consumer point of view. Yeah.
• 6:38
  You would never know that they were all owned by the same. Yeah. That's what I love about my job
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  is that I, you get to look at companies like this and you learn things like this. It's crazy to think
• 6:47
  and like I remember when we might, I didn't realize that Microsoft owned LinkedIn when I was back,
• 6:52
  look first looking at it. You're like, you're just all these things. You're just like a segue
• 6:55
  in Microsoft coming back Microsoft. Anything you didn't go up in Microsoft. Yeah. But no, it's actually
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  really interesting. And then so there. So the third pillar of perfumes and cosmetics and then
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  retailing. So they owned the DFS and for fours. Do they own all the retail network? What's
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  the DFS? You know, DFS, you know, the, um, DFS, you know, DFS, gallery, kind of like the kind of
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  like tax free shopping mall things. Yeah. And then they've got watches and jewelry and then they
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  have kind of other. Yeah. So they've just acquired them over time. They're just quite over time.
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  Yeah. So they actually bought Tiffany and co earlier back in 2021 in January. How much do you
• 7:43
  know how much they bought it for? 16 billion. Yeah. But like we're talking about a $400 billion
• 7:49
  company, 16 billion. It's not that much billion. I can't even comprehend that much money.
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  So that was the biggest luxury brand acquisition ever. Oh, you could do so much with that money.
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  Who's the CEO? Yeah. So his name is, and I'm gonna butcher this so
• 8:08
  apologies to any free. See people listening. And his name is Bernard. Oh, not. Oh, no. Yeah.
• 8:17
  It doesn't know. Which means you've definitely Bernard. Bernard. Bernard. We'll just call him B.
• 8:21
  Okay. So Bernard, how old is he? Yeah. He's about 17. He's quite old. And he's been working there
• 8:29
  for a long time. Yeah. So he started, oh, he's been there. I want to say like 30 plus years.
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  Wow. And he's a chairman and a CEO. And he owns 40 percent of the company. How much is that?
• 8:42
  160 billion. Yeah. And 60 hold on. I need to let that sink in. He's France's richest person.
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  And he's up there with like Jeff Bezos and the founder of Amazon and all those guys.
• 8:55
  He's, yeah. Wow. But he's quite under the radar. Oh, yeah. I feel like I've heard Jeff Bezos,
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  you know, all of like Marx, I could blah, blah, blah, blah, blah, so much. I've not heard Bernard.
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  Maybe Bernard's quite like cool and modest and just a bit. Well, he owns like a luxury
• 9:11
  fashion house. So he can't be there. Cool and under the radar. Yeah. But I mean, yeah.
• 9:16
  Wow. He's done a fantastic job. He must be very clever. Yeah. So the company generated $110
• 9:21
  billion of sales last year in 2021 and $20 billion of profit in one year. So you think 16 billion to buy
• 9:30
  Tiffany and co. It's not even one year's profit. Do you know what I mean? So like putting it in
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  perspective like that. I honestly can't, it's not really sinking in. I can't fathom that.
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  You know, because you obviously work with really big numbers with the work that you do. So you're
• 9:45
  kind of somewhat used to hearing even a billion, one billion to Mac. I'm like, I don't know what
• 9:51
  to put that in my head. Yeah. I guess you become immune. We're not immune. It's still a massive
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  number. Like I feel like I work in the dollars. The dollars and the cents and the thousands.
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  But like that's kind of where it stops. Billions is way too many. Yeah. So this company,
• 10:08
  LBMH has delivered 30% return per year for the last five years. So that's delivered around 300
• 10:16
  percent from 2017 to 2021. Wow. Yeah. So I mean, that's only five years longer. I haven't pulled up
• 10:25
  the stats for longer, but 30% return per year for the last five years. Well, it's been through a
• 10:29
  global pandemic and global markets have been selling off. And like if that's quite amazing to make
• 10:35
  300% return on your investment in five years. So what would that base how you'd bought?
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  Can we quickly do the maths on what that might be? So if you bought a stock five years ago from
• 10:45
  that. But three times. Yeah. Right. Yeah. So if you put $10,000 in you'd have $30,000. And five
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  years. Yeah. Oh my God. I think I know my next stock I want to invest in. Okay. Can we start
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  from the beginning then and go through the criteria? Yes. I mean, obviously even you just throwing
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  those thumbs out. I'm like, cool. It's obviously a good stock. Yeah. But could we? Yeah. Okay.
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  So first. So the first one, the structural growth industry. Yeah. So fashion.
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  I mean, they're covering different industries as well. Right. So it's like if one wasn't growing
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  that much, at least the other few would be. One thing I didn't mention before actually, which
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  is vital to that. So apologies. Is that about over 40% of the revenue comes from China.
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  And that's been going gangbusters. And I just want to when we talk about structural growth,
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  we talked, there's kind of a few reasons. And one of them is changing demographics or changing
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  consumer behavior. When we talked about structural versus cyclical, you remember that we were talking
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  about, you know, different long term. And it's and structural is something that's really long
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  term, which is yeah, changing demographics or consumer behavior. And so I just, I want to set a
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  scene. So I get comfortable. Yeah. I'm just going to hit you with some. Is this an imagination
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  like should I close my eyes? No, it's just more like setting the scene of a structural growth.
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  I'm going to shut my eyes just to really get on the side. Okay. So China is now 42 times larger
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  than it was in 1980. And it now counts for a third of global trade. By third? Yes, a third of global
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  trade. By 2030, it'll be the world's largest economy. 50% of its population, sorry, 50% of China's
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  population lives in the city. And in the next 10 years, that's going to go to 75%. So this term
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  of urbanization in China is happening at unprecedented speed. I can't believe I'm saying I'm
• 12:48
  unprecedented again. I'm so sick of that word. That is 75% of people in China who are living
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  this city. Yes. Yeah. So 50% of China's current population lives in cities. And that's going
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  to move to 75% in the next decade. So that's 170 to 200 million people that are going to move to
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  the city in the next decade. So that's nearly two thirds of the whole population of the US
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  moving to cities. And that's a huge driver of economic growth, which then flows down to this
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  this rising middle class or this increase increase in spending ability to spend increase in
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  disposable income from this middle class. And so that is forecast to grow at about 7% per year.
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  So when we talk about structural growth, one of those is changing demographics and consuming
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  behavior. So you've got this massive wave. There's 170 to 200 million people over the next decade
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  that will be able to spend more by more luxury items. And with LVMH being the top luxury brand in
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  China, it's just sitting there waiting for this title wave. And so that's kind of what we mean when
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  we talk about structural growth trends is I wouldn't even know to think about that though. If I was
• 14:12
  looking at a stock trying to decide if it's an structural growth industry, how you even meant to
• 14:18
  like what I know and that's difficult because we get thrown these statistics all the time and
• 14:22
  we're constantly reading it. But I think it's if you read newspapers and you start looking at or
• 14:31
  googling these companies, you start seeing these articles and things and you start seeing what other
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  people have written about LVMH in terms of their views and stuff. And you start to form your own
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  view if that makes sense. So it's basically the more research that you probably should do, the more
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  you will uncover this kind of thing. But it's really just comes down to like reading the news,
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  it might be one headline that you catch that says urbanization is off the charts in China or
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  something. And then you're like, oh, that's part of my interest. I'm going to read that. And then
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  you start thinking, hang on, who's going to benefit from that? That's going to be luxury goods
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  companies like LVMH or you're going to be like, that's going to benefit luxury goods coming.
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  I'm going to see if there's any listed. So it's kind of having we talk about that investing mindset
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  of when you read a news paper or you read a news article or you hear a comment or it can be
• 15:22
  any kind of way that you get that little spark or it's quite worldly though. Like it's not,
• 15:27
  you know, it's not just as simple as focus on the stock market and stocks and companies. It's
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  actually really quite a holistic view on what is happening globally and in the world. And it might
• 15:38
  not be of interest to you. And that's fine. But something will be of interest and you'll be able
• 15:42
  to spot a trend. You know, some people might have visited China recently and seen this happening
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  or they might have, they might be Chinese themselves or they might, you know, there's so many
• 15:54
  different ways that you could have, you could, you could see this trend. And with a structural
• 15:58
  growth trend, you don't have to find it now. Do you know what I mean? You could find it in,
• 16:03
  in two years time and you, or, you know, it's still going to be going because it's such a long term
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  trend. So with that, with the whole influx of people moving to the city in China,
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  would a good question be looking at other goods that are produced in China,
• 16:22
  see what some of the top ones are exporting out of there, look into those companies,
• 16:26
  see if they're listed. You know, yeah, yeah, yeah. I mean, is that, or, yeah, or even Western brands
• 16:31
  that are like Starbucks, for example, you know, more people being able to afford to buy coffee every
• 16:36
  day. I'm just trying to think off the top of my head, but it could be any kind of company,
• 16:42
  it could be a Western company that's expanding in China because they can, they can see this trend,
• 16:46
  or like you see it, it could be in a company exporting out of China because now, you know,
• 16:52
  there's a lot more staff they can employ and then they can actually produce those goods and
• 16:55
  and shut them off overseas. There's also a kind of an ESG overlay to this, which I didn't realize
• 17:01
  until I started. Hey, hey, hey, you just said an acronym without breaking it down. Environmental
• 17:08
  governance, social, social governance, ESG, ESG environment, social governance. Yeah.
• 17:18
  Honestly, so this is just kind of the responsible investing that we talked about in last
• 17:22
  episode, about, I need to make myself a glossary. I know of that in the studio every time.
• 17:28
  Just a little acronym. I knew you were saying when you said it, I knew you were talking about
• 17:31
  conscious investing, but I thought as well as someone's listening and maybe they're heading
• 17:34
  out of it. That's true. So what was the, so it's just all about buying less and buying better.
• 17:40
  So there's, with, you know, consuming less if instead of buying, that's why when you said Starbucks,
• 17:47
  I thought that can't be. Yeah, sorry. Yeah, that's not a conscious. But I mean, we,
• 17:52
  yeah, finding, you know, we're kind of talking, we're not kind of talking conscious investing.
• 17:56
  No, no, no, no, that's fine, but when you said there's a conscious investing head over,
• 18:00
  I was like, oh, they don't seem to tie together. Yeah. So this is kind of, instead of buying
• 18:06
  teen handbags, you buy one more expensive one. So you've also got that element coming through as
• 18:11
  well. Okay. What's number two? Number two, revenue visibility. Now, at first glance, you
• 18:18
  probably think, you know, there's not a lot of revenue visibility in this business. Someone,
• 18:22
  you know, if you fashion, you would think because you can't, and you don't know if someone's
• 18:25
  going to walk into someone by a handbag or not. But we say revenue visibility comes in three ways,
• 18:30
  and that's having, you know, consistent long-term track record of revenue growth,
• 18:37
  being subscription revenue, or being contracted revenue. I was about to say I remember that one.
• 18:43
  So this is the first one is that they, that LVMH has a very long, consistent track record of
• 18:48
  revenue growth. So that gives you some confidence in the visibility of the future. So they've
• 18:54
  grown sales by 11% per year for the last 10 years. So that's translated into earnings growth
• 18:59
  of 15% per year. So you can get comfortable that they have weathered a few storms within that 10
• 19:06
  years and that. Even if they had a few terrible designs. Not saying it's 11% every year, it's an
• 19:11
  average. So, but you can get pretty confident that it's a pretty well-managed company and that they
• 19:17
  can get through different economic cycles and all that. So that gives me confidence on the
• 19:24
  revenue visibility. And so because they've been around for more than 30 years, there's also that
• 19:30
  it's not just a five-year look. It's actually like long standard. And you look at the track record
• 19:35
  of them acquiring certain brands and businesses, integrating them and growing. And it's now worth
• 19:42
  400 billion dollars. The company. So you can get comfort knowing that when they bought Tiffany and
• 19:46
  Co. last year, that that's probably going to be a great acquisition. They're going to integrate it.
• 19:52
  It's further diversifying. It's another brand. You know, you can get because they've done
• 19:56
  they've had a track record of it. So track records are great in terms of investing because we don't
• 20:01
  have anything to look to in the future. We only have the past. So if you can invest in a well-managed
• 20:07
  company, there's a consistent track record that that gives me. Also, I guess I mean, this might be
• 20:13
  a weird way to look at it. But I imagine Tiffany and Co wouldn't sell to a company that could potentially
• 20:20
  dive the brand. You know, all of the brands that they've acquired are really premium high-quality brands.
• 20:27
  And I feel like the people who started them wouldn't just sell them out for the sake of getting
• 20:31
  money. They would want them to be well-run. And the thing is, if you're a publicly listed company,
• 20:37
  you don't have to say if someone comes, so say someone comes and offers you a 40% premium.
• 20:45
  So that's 40% on top of what? So say they were trading in a dollar and someone comes and goes,
• 20:49
  I'll give you a dollar 44 years and goes to every single sheholder because there's a publicly
• 20:54
  listed company and everyone says, yeah, oh my god, amazing. In sales, you don't have to say
• 20:58
  in where the company goes. Whereas if it's a private company, you can be like, no, thank you,
• 21:03
  because you own the shares. Of course. Yeah. So, but that's the good thing about LVMH is because
• 21:10
  Bernad owns 40% of the company. He still has a huge say. If someone comes and offers
• 21:19
  to buy the business for 600 billion, he could say no and they wouldn't be able to buy it because
• 21:25
  he's to one's 40%. But what about the other brands that he's acquired? Are they the same or no?
• 21:29
  Because you're going to say Tiffany and Kong. Yeah. All of those brands, they might still have had
• 21:37
  someone that owned a huge percentage right? Yeah, yeah. I don't know. But, you know,
• 21:41
  if a friend has a price, it might not be a 40% premium. And then they'll be like, okay, we'll give you
• 21:46
  50% premium. And they'll be like, no, 60% premium. They'll be like, okay. Yeah. But that's
• 21:51
  right. So, say it was Tiffany and Kong. Yeah. And you're looking at the fact that Bernad bought it.
• 21:56
  Yeah. Say the founder and, you know, CEO of Tiffany and Kong owned 40%. Yeah. And Bernad came along
• 22:06
  offered X amount. I imagine if someone as a CEO owns a huge amount, they would want it to be bought
• 22:12
  by someone that wasn't going to drive the brand to the ground. You know what I mean? So, I think
• 22:16
  that's probably a tick of approval and the fact that he has got so many successful brands that he's
• 22:22
  acquired. Yes. Because he's well respected and does what he does with those brands. Yeah. And that
• 22:29
  kind of comes into the next one, which is the aligned management team, which is number three.
• 22:34
  And he has built a legacy. He has built the largest global luxury company in the world.
• 22:42
  Quite a man. Yeah. And so I love that it's a guy as well. Yeah. You kind of would assume it
• 22:48
  would be a woman. Yeah. But he obviously loves fashion. He was dope with the pope of fashion.
• 22:53
  He must be star. You'd be walking around like, oh my god. I'm the pope of fashion. The pope of
• 22:58
  fashion. I imagine your wardrobe. I don't know. I don't know. It's not only my style. Yeah.
• 23:07
  Imagine your alcohol cabinet. Imagine your jewelry. Yeah. And then you wouldn't be.
• 23:12
  You wouldn't short of match. No. No. You would have. Yeah. You would be well.
• 23:16
  Stocks. Stocks. And all about it. Yeah. And he was actually buying shares last year.
• 23:23
  And so it would be buying off public shareholders. Yeah. So this is one of the most positive signals.
• 23:31
  You can you could ever find in my opinion for an investment. And it's not it doesn't always
• 23:37
  ring true. But if a CEO or a founder or any insider in the company say the chairman or anything
• 23:43
  is buying shares in the company, those people know the company the best. They know the company so
• 23:49
  well. If they're buying shares, they've got some good shit in store. They got some good
• 23:55
  intel. So this is the one time that you can you could literally just jump on the bandwagon
• 24:00
  and be like, I'm going to buy shares. I think I'm going to. Yeah. Yeah. So you can actually
• 24:05
  and they have to disclose it. They have to disclose when they're buying shares because they consider.
• 24:09
  Would you be screaming it from the rooftops? Like just over. Oh, that's what I mean.
• 24:14
  I mean, there is a caveat that some CEOs buy shares and the cheaper I still was down. But it's
• 24:19
  I don't know the status, but it's majority of the time. It is a very, very positive signal.
• 24:24
  It just is kind of the flip side is if you see a CEO selling a large chunk of his shares.
• 24:29
  Again, I wonder if a CEO would ever do that just to try and get the share price off.
• 24:33
  You know, the thing's like, oh, shit, things are not going very well all the time. And then they're like,
• 24:37
  oh, just buying the 50 shares. You know, and then people are, oh, but just plans for the company.
• 24:41
  It's got to be a big amount. It's not true. It's hitting the sand all by $50.
• 24:47
  It's like, mate, put your money on your mouth as if you're going to turn the ship around.
• 24:50
  Yeah, yeah.
• 24:51
  So, yeah, but if he or she was buying a large amount of shares, that would be a big tick for me.
• 25:02
  And he runs this like a family business because he is such a large shareholder on his 40%.
• 25:08
  It's like a family business. You know, like they, it's so in steady growth.
• 25:11
  All the cousins are employed. Right. He's got all his and all the daughters and yeah.
• 25:15
  So the wives of the people that marry into the family, like the whole everyone works there.
• 25:19
  And that's like, that's what you want when you're a shareholder. You want someone to run it,
• 25:23
  like it's going to be run for 10, 20 years. You know, you don't want to invest in a company.
• 25:27
  That's just the head to have a good financial result through much time.
• 25:31
  I can put back. Yeah. I mean, some people don't say, well, a lot of deal, but yeah.
• 25:36
  So, aligned management team, giant tick. Giant tick. I think we could.
• 25:41
  I don't think we could get bigger. Yeah. Is that five or is that four?
• 25:46
  That's three. Oh, Lord. How long has it been going?
• 25:51
  Sure. All right. Let's. Yeah.
• 25:53
  Number four balance sheet. So they've got a bit of debt.
• 25:56
  But 10 billion dollars, which is a bit of debt.
• 26:01
  But like I said, they made 20 billion dollars in one year. Okay.
• 26:05
  So that debt can get paid off super quick. So it's actually not a lot.
• 26:09
  And they're expected to be net cash next year, which means they'll probably have more acquisitions.
• 26:14
  So they're in a pretty strong financial position.
• 26:17
  What was that? I don't know.
• 26:21
  Irish kind of. I blame the booster.
• 26:25
  It's going in my voice box. Number five, secret sauce.
• 26:31
  Oh, the secret sauce. They've got lots of secret sauces, don't they?
• 26:34
  Because they've got so many brands. So many brands.
• 26:37
  I want to try guess what this sauce would be. It would be tomato.
• 26:42
  It would be like a barbecue alley of sorts, you know, like a little bit jazzy,
• 26:47
  quite premium, you have to pay extra for it.
• 26:50
  Is it the fact that they have so many of the luxury brands? So they have a huge portion of the.
• 26:55
  Yeah. This one's not really. I mean, we say this one subjective anyway.
• 27:00
  For me, I think it's that they own such strong brands, you know, Louis Vuitton,
• 27:07
  Moette Hennessey, Kristen Dior, there's such strong brands in themselves and like,
• 27:16
  definitely, you know, they've got the leaders in each category effectively in terms of luxury
• 27:20
  brands. So that itself is a is a secret sauce sauce. I can't even say it properly.
• 27:30
  I also think there's a net. So they've got kind of what we would call a competitive
• 27:33
  mode, you know, because they own so many brands. And when you're purchasing a product that
• 27:39
  that is this expensive, it's a, a motive purchase. It's a status. It's a desirability. So you want,
• 27:46
  you want that brand, you want that Celine brand, you might better afford it and you could buy
• 27:51
  something else, but you don't want to because you want that status. So it comes with owning a product.
• 27:56
  Is that your stomach? Oh my god, I'm going to start bringing in some almonds.
• 28:03
  And you're going to have to eat five at the door before you come in.
• 28:08
  And then it's also like we spoke about diversified portfolio of brands. So you've also got that
• 28:14
  kind of competitiveness as well. So it kind of ticks a few boxes in terms of this.
• 28:20
  The sauce. The sauce? Yes.
• 28:22
  No, that's not. I'm probably the only raise my stomach, but it's because that's the sauce.
• 28:26
  Talking about Ayoli. One thing that we should talk about more, I think, when we talk about these
• 28:31
  companies, when we do stock stories, we always talk about the positive side of things.
• 28:35
  And with every investment, there's always risk. And to just finish on a
• 28:42
  but we do need to think about the risks we're investing in companies. And with this one,
• 28:47
  yes, the exposure to China is a great positive and it's, you know, a great structural growth
• 28:52
  story, but it also can be a risk. And we, I think it was last year, the government in China
• 28:58
  really cracks down on luxury items because they wanted to smooth out the dispersion of wealth.
• 29:05
  So they wanted to, you know, improve the wealth disparity in the country. So that's cool.
• 29:08
  That's cool. They put, yeah, China.
• 29:13
  Could it just pause for a second? That's amazing.
• 29:18
  It was sort of the response I was expecting. Go China.
• 29:22
  No, that's not. Yeah, yeah, yeah. It's amazing. I mean, not great for LVMH.
• 29:26
  No, no, it's not. But it was only a small dip in the issue price, but, and we're long-term
• 29:31
  investors. So, but there is kind of these things that create headlines and, you know,
• 29:35
  some risks that you should be aware of. But this is why we say diversify because there will be
• 29:39
  times when, you know, it could have been Europe or it could have been the US comes out and puts
• 29:44
  an increased tax on luxury goods or something. And, you know, the there earnings will be impacted.
• 29:50
  So it's making sure that you diversify and invest in, you know, different companies or different
• 29:54
  assets. But I must say, I have faith that they would be able to jog around the problem.
• 29:58
  Oh, totally. Yeah, jog around. But you know what I mean?
• 30:01
  We'll just buy another brand over here. Yeah, like I feel just looking at what
• 30:05
  everything that you've seen. Yeah. If there was, you know, huge tax lapped on luxury goods or
• 30:11
  their walls would have earned, that they would figure out a way to, oh, definitely not.
• 30:15
  Yeah, it's very well managed. Yeah. And the last thing is that a small caveat.
• 30:21
  If anyone's currently searching on cheeses or hatched to buy this, is that you can't buy
• 30:28
  on cheeses at hatch because it's listed in France. So it's a bit negative, but you can buy
• 30:32
  on stake. And I'm not going to go into the details of how, but because it's a foreign company,
• 30:40
  you can actually, you can actually list in the US as a foreign company under what we call an ADR,
• 30:47
  which is an American depository receipt. Don't worry. I know. I'm not going to even open that
• 30:53
  can of worms. So you, at the ticker is LVMUY. Okay. But if you looked up LVMH on stake,
• 31:04
  you'll be able to find it. But it's just, it's just a way that foreign companies get around
• 31:08
  being able to listen to the US and how we can get access to it when platforms we use,
• 31:13
  they're only investing in US stocks. So author and ETF is another way, but. Yeah. I feel like I
• 31:18
  would want to go straight to the bull's eye, you know. If you do all this work, you're like,
• 31:23
  ETF that maybe has a little bit of LVMH. I'd like to have the whole LVMH. I like a style. Yeah,
• 31:29
  a style. Yeah. Bold. Here I am. Yeah. Pretty to buy. All so ready for dinner. So should we wrap this up?
• 31:35
  Good idea. Okay. That was really great. I love stock stories. I always learn so much.
• 31:40
  They're actually fun to do. We should do more of them. They're so much more fun. I almost
• 31:43
  want to do a whole season. I need to find a bad one. Yeah. Actually, that's a good idea,
• 31:47
  but I just like, it's a positive person, you know. It's also boring because then you don't
• 31:53
  know. I know. I know. I'm going to go invest in that. Yeah. I think we keep doing some positive
• 31:57
  ones because it's so great for people to listen here, everything, like here at Analyze and then
• 32:03
  if they want to invest in themselves, they can decide to. Maybe the next one will do a bit more
• 32:06
  of a balanced view. Yeah. Cool. All right. Bye. Bye. Thank you so much for joining us,
• 32:15
  but today's episode of Raising the Curve. Please subscribe and leave a review on whatever
• 32:19
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• 32:24
  think would benefit from it. For more information about the curve and how you can learn more,
• 32:28
  head to the curve.co.nz or find us on socials at the underscore curve in Z.