TIP643: The Luxury Strategy w/ Christian Billinger

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 12 July 2024

⏱️ 66 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today’s episode, Clay is joined by Christian Billinger to discuss The Luxury Strategy by Kapferer and Bastien. Over the past 20 years, some of the best performing companies in the stock market have come from the luxury sector. For example Hermes and LVMH, which are both companies based out of France, have compounded at 21% and 16% respectively. Christian is chairman of Billinger Förvaltnings AB, which invests in publicly listed equities. The firm seeks to generate attractive long-term total returns in real terms without employing financial leverage. Christian previously covered European equities for Cheyne Capital, Gartmore, and GAM in London. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 04:12 - The definition of luxury. 04:12 - How luxury companies create their own demand. 08:47 - What products are most prevalent in the luxury industry. 10:28 - The primary differences between a premium and a luxury product. 19:26 - What the non-return effect is, and how it can make luxury companies more resilient. 26:09 - An overview of Kapferer’s anti-laws of marketing. 30:39 - Why luxury companies seek to keep non-enthusiasts out of their ecosystem. 36:46 - How higher prices can lead to higher demand from consumers in the luxury space. 40:36 - How luxury brands approach e-commerce & pricing. 57:23 - How to think about the valuation of luxury companies. 01:03:28 - How luxury brands tend to perform during a recession. And so much more! Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members. Christian’s investment firm. Books mentioned: The Luxury Strategy, Selling Europe to the World. Related Episode: TIP582: Quality & Defensive Investing w/ Christian Billinger. Follow Clay on Twitter. Check out all the books mentioned and discussed in our podcast episodes here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: River Toyota Range Rover Sun Life SimpleMining The Bitcoin Way Onramp Briggs & Riley Public Shopify Meyka Fundrise AT&T iFlex Stretch Studios HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:03.0	Over the past 20 years, some of the best performing companies in the stock market have come from the luxury
0:08.3	sector.
0:09.3	For example, Ermez and LVMH, which are both companies based at France, have compounded at 21% and 16% respectively.
0:17.8	The thing about these luxury brands, though, is that you need to take almost everything
0:21.2	you learned about business and economics and essentially throw it out the window.
0:25.6	For instance, when the best luxury companies increase their prices,
0:29.5	they oftentimes see higher demand for their products and not lower.
0:33.7	And the Ermez CEO is on record for saying when a product sells too well,
0:38.3	they'll pull it off the shelves.
0:40.1	To help break down the DNA of luxury companies, I'm joined by Christian Billinger to talk about the lessons from the book The luxury strategy by Capfer and Bastion.
0:50.0	Christian is the chairman of Billinger for Voldtine's AB, which is a privately held company
0:54.8	based out of Sweden that invests in publicly listed equities.
0:58.6	His firm seeks to generate attractive long-term total returns without employing financial leverage.
1:03.6	During this chat, Christian and I cover how luxury companies create their own demand.
1:08.5	The primary differences between a premium and a luxury product, what the non-return effect is and how it can make luxury companies
1:15.4	more resilient, an overview of Capfers' anti-laws of marketing, which is definitely my favorite
1:20.9	part of the book, how luxury brands approach e-commerce and pricing and
1:24.9	much more.
1:25.9	I really enjoyed reading through this book and Christian is the perfect guest to bring on the
1:29.9	show to discuss these topics as he's been invested in the luxury sector for many years.
1:34.6	This is a fascinating discussion unveiling the luxury sector so with that I hope you enjoy today's
	...

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