TIVP027: LVMH (MC): Investing in True Luxury w/ Shawn O’Malley & Daniel Mahncke
The Intrinsic Value Podcast - The Investor’s Podcast Network
Evaluating LVMH: A Cautious Investment Perspective
This chapter focuses on the investment valuation of LVMH, weighing its attractiveness against other opportunities. The discussion includes analysis of potential returns and hints at a future pitch for a competing premium brand in the luxury market.
Shawn O’Malley and Daniel Mahncke break down LVMH (ticker: MC), an iconic luxury goods empire with brands ranging from Louis Vuitton to Moët, Dior, Chandon, Hennessy, Tiffany, Bulgari, and Tag Heur, among others. It’s a powerful conglomerate built by one of the world’s richest men, Bernard Arnault, known as the “wolf in cashmere” for his ruthless consolidation of power in the luxury industry.
In this episode, you’ll learn how Arnault built the LVMH empire, what makes “true luxury” so special and different from other types of businesses, the parallels between LVMH and Berkshire Hathaway, what the backbone of this conglomerate is, whether there’s actually a backdoor way to buy LVMH shares at a 20% discount, whether the stock is currently fairly valued, plus so much more!
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IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
15:57 - How Arnault got his start and took control of LVMH.
20:56 - What inspired Arnault to build a luxury conglomerate.
24:05 - How LVMH benefits from economies of scale.
30:31 - Which brands drive business the most.
51:59 - What factors matter most in luxury purchases.
56:07 - What are the most important markets for luxury goods?
01:00:59 - Whether the backdoor way to buy LVMH shares at a discount is too good to be true.
01:08:03 - Whether LVMH is fairly valued and whether it’s added to the Intrinsic Value Portfolio.
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.
- Sign Up for The Intrinsic Value Community.
- LVMH’s rich history of tradition and desirability.
- Business Breakdowns’ 2022 episode on LVMH.
- Acquired’s podcast on LVMH.
- Financial Times’ profile of Bernard Arnault.
- WSB645: The King of Luxury with Christian Billinger.
- WSB643: The Luxury Strategy with Christian Billinger.
- Bernard Arnault’s 2024 interview with CNBC.
- Explore our previous Intrinsic Value breakdowns: Nintendo, Airbnb, AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports.
- Check out the books mentioned in the podcast here.
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