TIVP027: LVMH (MC): Investing in True Luxury w/ Shawn O’Malley & Daniel Mahncke

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Education, Investing, Business

4.6 • 592 Ratings

🗓️ 6 July 2025

⏱️ 84 minutes

🔗️ Recording | iTunes | RSS

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Summary

Shawn O’Malley and Daniel Mahncke break down LVMH (ticker: MC), an iconic luxury goods empire with brands ranging from Louis Vuitton to Moët, Dior, Chandon, Hennessy, Tiffany, Bulgari, and Tag Heur, among others. It’s a powerful conglomerate built by one of the world’s richest men, Bernard Arnault, known as the “wolf in cashmere” for his ruthless consolidation of power in the luxury industry. In this episode, you’ll learn how Arnault built the LVMH empire, what makes “true luxury” so special and different from other types of businesses, the parallels between LVMH and Berkshire Hathaway, what the backbone of this conglomerate is, whether there’s actually a backdoor way to buy LVMH shares at a 20% discount, whether the stock is currently fairly valued, plus so much more! Prefer to watch? Click ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ to watch this episode on YouTube. IN THIS EPISODE, YOU’LL LEARN 00:00 - Intro 15:57 - How Arnault got his start and took control of LVMH. 20:56 - What inspired Arnault to build a luxury conglomerate. 24:05 - How LVMH benefits from economies of scale. 30:31 - Which brands drive business the most. 51:59 - What factors matter most in luxury purchases. 56:07 - What are the most important markets for luxury goods? 01:00:59 - Whether the backdoor way to buy LVMH shares at a discount is too good to be true. 01:08:03 - Whether LVMH is fairly valued and whether it’s added to the Intrinsic Value Portfolio. *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Get smarter about valuing businesses in just a few minutes each week through our newsletter, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Intrinsic Value Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Sign Up for ⁠⁠⁠⁠⁠The Intrinsic Value Community.⁠⁠⁠⁠ LVMH’s rich history of tradition and desirability. Business Breakdowns’ 2022 episode on LVMH. Acquired’s podcast on LVMH. Financial Times’ profile of Bernard Arnault. WSB645: The King of Luxury with Christian Billinger. WSB643: The Luxury Strategy with Christian Billinger. Bernard Arnault’s 2024 interview with CNBC. Explore our previous Intrinsic Value breakdowns: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Nintendo⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Airbnb⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠AutoZone⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Alphabet⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ulta⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠John Deere⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Madison Square Garden Sports⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Check out the books mentioned in the podcast ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠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. Browse through all our episodes (complete with transcripts) ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Try Shawn's favorite tool for picking stock winners and managing our portfolios: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠TIP Finance⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Enjoy exclusive perks from our ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠favorite Apps and Services⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn how to better start, manage, and grow your business with the ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠best business podcasts⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. SPONSORS Support our free podcast by supporting our ⁠⁠⁠⁠sponsors⁠⁠⁠⁠: Harvest Right Connect with Shawn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ | ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ | ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Email⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Connect with Daniel: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ | ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ | ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Email⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ HELP US OUT! Help us reach new listeners by leaving us a ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠rating and review⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Spotify⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠! 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! 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	And the thing with true luxury is that in some cases, the more you raise prices, the more
0:06.3	attractive the products actually become. And long term, Louis Vuitton can probably sell more
0:12.9	purses at $2,000 than it would if they were priced at $500. Because of that luxury positioning
0:20.1	I'm describing, where the higher price tag signals
0:23.2	a whole bunch of things that end up making customers only want to own that item more.
0:28.2	And at a lower price, the product would fundamentally be less attractive, which is kind of
0:32.5	crazy to say because it's less exclusive and implies that maybe it's just a premium item and not a true luxury
0:38.5	one that comes with all these other status symbols around it.
0:47.7	Last week, we did our mid-year portfolio review. So if you missed that episode, I would
0:53.2	encourage you to check that out
0:54.7	right after today's episode so you can learn more about the different companies we have invested
0:59.4	in after having them covered here on the show. And also how we think about sizing those positions.
1:05.2	And today, I know that, Sean, you are fresh of the Markell shareholder meeting and attending a
1:10.1	dinner with Tom Gainer.
1:11.3	So you're probably full of all kinds of investing wisdom and ideas.
1:16.4	And I think you also just went to a Value X conference too, right?
1:21.1	It's definitely been a busy few weeks, Daniel.
1:23.5	That's for sure.
1:24.2	But it's been a ton of fun.
1:25.5	And I've networked with some really incredible investors the last few days and gotten some ideas for companies to cover on this show that
1:33.6	might show up in the next few weeks. And speaking of which, we've got a pretty compelling pick
1:38.3	for today, I would say you'll be making the case for LVMH and helping us understand the fairly complex company structure a bit better.
	...

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