Swatch has been on a charge this year, finally offering decent performance to long-suffering investors who have witnessed crushing underperformance vs. luxury stocks. Perhaps that comparison is the first problem, as there is far more to Swatch than just luxury brands.
The only thing that is green about Aston Martin is the colour on the Formula One cars that are giving the brand a major boost at the moment. Share price action this year has been highly speculative, with tough financial results and a balance sheet that looks set to need more equity capital.
In Episode 121 of Magic Markets, we reflect on some of the recent insights uncovered in our research for Magic Markets Premium. These include how the poor use of share buybacks by US companies, the divergence in performance between national and regional banks in the US, why we look for optionality in a business model, how to view cylical companies in a portfolio and the recent popularity of the luxury sector, why investors are buying these companies and the risk of chasing the hype.
Use the podcast player below to listen to our discussion on Ferrari and its Q2’22 result, which accompanies the detailed write-up below: (Date of report: 22 September 2022) Passion meets science. Racing meets business. A disastrous racing strategy meets the best road cars in the world. It can only be Ferrari, an enigma at times and an iconic brand that has transcended motoring to become a luxury brand in its own right. Ferrari’s mantra is to deliver one car less than the market demands, choosing to drive scarcity rather than overall revenue. Is this commitment to the brand’s ethos its greatest [...]
Use the podcast player below to listen to our discussion on Farfetch and its Q2’22 result, which accompanies the detailed write-up below: (Date of report: 1 September 2022) For many, the closest they can get to the luxury goods industry is by being a shareholder rather than a consumer. We are talking about timepieces and handbags that cost more than a family hatchback! This $300 billion industry is known for high margins and a resilient client base that is almost immune to market cycles. As digital generations have grown up to become consumers of this industry, shopping habits are starting to [...]