We Study Billionaires - The Investor’s Podcast Network cover image

TIP632: Mastermind Q2, 2024 w/ Tobias Carlisle and Hari Ramachandra

We Study Billionaires - The Investor’s Podcast Network

NOTE

Analysis of Luxury Segment Industries and Market Cycles Impact on Companies

Different tiers within the luxury segment react differently to market cycles. Companies like Burberry, targeting aspirational luxury shoppers, are more impacted by economic fluctuations compared to high-end luxury. Investing in low-quality companies during industry slumps can lead to significant rebounds if they have strong balance sheets. Timing the market is crucial in cyclicals investing, resembling a game of predicting others' actions. Burberry's current market cap of $4 billion offers a potential upside to $10-12 billion, considering achievable top-line growth and financial metrics. The stock's current price may already reflect some negative expectations, raising concerns about the upside compared to other investment opportunities.

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