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TIP659: Hermès Stock Deep Dive w/ Shree Viswanathan

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Sep 13, 2024

Shree Viswanathan, founder and portfolio manager of SVN Capital, dives into the world of Hermès, known for its luxury craftsmanship. He highlights Hermès' long-term business strategy, impressive consistent growth since its IPO, and the challenges it faces, including a takeover attempt by LVMH. Shree details the brand's strong moat and unique capital allocation approach, while discussing growth opportunities in the luxury sector. He also shares his insights on valuation metrics and the risks that investors should keep an eye on.

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ANECDOTE

Hermès History

Hermès, founded in 1837, began as a harness workshop serving European nobility.
It evolved into a global luxury powerhouse, emphasizing handcrafted items and artisanal skills.

INSIGHT

Long-Term Focus

Luxury brands must balance short-term profits with maintaining long-term brand value.
Hermès prioritizes perceived value and quality over increasing production to maximize short-term earnings.

ANECDOTE

Rejecting Conventional Wisdom

In the 1970s, consultants advised Hermès to cut costs and quality, like other luxury brands.
Hermès rejected this advice, maintaining its commitment to quality and adopting a "no consultants" philosophy.

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TIP659: Hermès Stock Deep Dive w/ Shree Viswanathan

Hermès History

Long-Term Focus

Rejecting Conventional Wisdom

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