TIP659: Hermès Stock Deep Dive w/ Shree Viswanathan

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 13 September 2024

⏱️ 98 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today’s episode, Clay is joined by Shree Viswanathan for a stock deep dive on Hermès. Hermès is a luxury goods manufacturer renowned for its high-quality craftsmanship. The brand is known for its iconic products, such as the Birkin and Kelly bags, silk scarves, and equestrian-inspired items. Since the IPO in 1993, shares of Hermès have compounded at 20.6% (excluding dividends), while the S&P 500 had a total return of just 10.4%. Shree Viswanathan is the founder and portfolio manager of SVN Capital. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 02:38 - A business overview of Hermès. 10:28 - Examples of Hermès thinking exceptionally long-term in their business strategy. 30:16 - The attempted takeover of Bernard Arnault. 37:59 - The strength of Hermès’ moat. 56:01 - The growth opportunities ahead for Hermès and the luxury industry more broadly. 01:03:22 - How Hermès approaches capital allocation. 01:14:15 - Shree’s thoughts on Hermès’ valuation. 01:29:51 - Risks that investors should monitor for Hermès. 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. Shree’s fund: SVN Capital. Follow Shree on Twitter. Best Anchor Stocks write-ups on Hermès. Books mentioned: 100 Baggers, The Founder’s Mentality, The Luxury Strategy. Stewart Brand’s seminar on long-term thinking. Howard Marks’ podcast with Morgan House. Related Episode: WSB585: Concentrated Value Investing w/ Shree Viswanathan. Mentioned Episode: WSB645: The King of Luxury 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 Daloopa The Bitcoin Way American Express Found Vacasa Onramp Facet SimpleMining Public Fundrise USPS AT&T Shopify Fundrise 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	On today's episode, I'm joined by Sri Vizwinothan for a stock deep dive on Airmez.
0:08.0	Sri owns Airmez in his fund Svean capital, and he takes a long-term concentrated patient approach to investing in
0:15.6	public equities.
0:16.6	Ermez is one of the most valuable luxury brands in the world, renowned for its
0:21.0	high quality craftsmanship and rich heritage.
0:24.0	The brand is known for its iconic products such as the Birken and Kellybags, silk scarves, and horse-related items.
0:31.0	Since the IPO in 1993, shares of Ermez have compounded at 20.6% excluding dividends,
0:38.4	while the S&P 500 has had a total return of just 10.4% over the same period.
0:44.4	Eremez was founded in 1837,
0:47.3	and it's still managed by the founding family
0:50.0	who owns 67% of the shares.
0:52.8	These shares are controlled by three branches of the founding family
0:56.3	and combined, the shares are worth roughly $155 billion,
1:02.0	making them one of the wealthiest families in the world.
1:05.1	During this episode, Sri and I give a business overview of Ermez.
1:08.8	We share the story of the attempted takeover of Bernard Arno. We discuss the strength of Ermes' moat,
1:14.8	the growth opportunities that lie ahead,
1:17.0	their approach to capital allocation,
1:19.0	their very rich valuation,
1:20.7	and the most important risks going forward.
1:23.6	This was one of my favorite episodes I've recorded on the show, so I really hope you
	...

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