To The Moon

🌟🌟🌟The fascinating world of Haute Coulture or luxury goods have long been associated with status, exclusivity and craftsmanship.  Whether it is a designer bag, a high end watch or a luxury car, these items often symbolise success and personal taste.  But is it better to indulge in luxury goods or invest in the companies that produce them?

The Case for Buying Luxury Goods 

Tangible enjoyment - owning luxury goods provides immediate gratification and a sense of prestige.

Resale value - Some luxury goods like rare watches or handbags appreciate in value over time.

Personal use - Unlike stocks, luxury goods serve a functional purpose and can be enjoyed daily.

The Case for Investing in Luxury Stocks 

Potential for Capital Growth - Luxury stocks have historically outperformed the market due to brand loyalty and high margins.

Diversification - Investing in luxury brands allows exposure to a global market without the risks of owning physical goods.

Passive Income - Some luxury stocks offer dividends, providing a steady income stream.

Which Luxury Stocks to Buy?

LVMH Moet Hennessy Louis Vuitton $LVMH-Moet Hennessy Louis Vuitton(LVMHF)$ - The world's largest luxury company, spanning multiple brands.

Ferrari - A prestigious luxury sports car manufacturer with strong brand recognition.

Tapestry $Tapestry Inc.(TPR)$ - A leading luxury fashion house with brands like Coach and Kate Spade.

Capri Holdings $Capri Holdings Ltd(CPRI)$ - Owner of luxury brands like Versace, Michael Kors and Jimmy Choo.

What are recent market trends for luxury stocks?

Luxury stocks have faced a mix of challenges and opportunities in 2025.  Here are some key trends:

Valuation Fluctuations - The luxury sector is largely fairly valued, with some instances of overvaluation and undervaluation.

Macroeconomic Headwinds 

The luxury sector is experiencing a slowdown with price increases reaching a ceiling and negatively affecting demand from aspirational luxury consumers.  China which is a key market, has seen reduced growth, impacting global luxury sales.

Sector Divergence - While traditional luxury brands like LVMH and Kering have struggled, luxury automotive brands such as Ferrari and Porsche have performed well, driven by strong demand.

Investment Opportunities - Some undervalued luxury stocks such as Kering, Swatch, Burberry, Hugo Boss and Capri Holdings, may present buying opportunities.

Investment Strategy for LVMH

Of all the Luxury brands, I like LVMH best as it has a strong brand portfolio and consistent revenue growth, making it a solid long term investment. 

Dividend Income - LVMH offers stable dividends, making it attractive for income focused investors like me. 

Resilience in Economic Downturns - LVMH's diversified luxury segments help it to weather economic fluctuations. 

Brand Expansion and Acquisitions - LVMH continues to acquire and expand, strengthening its market dominance. 

Luxury Goods versus Luxury Stocks - Which is better? 

Personally I prefer buying luxury stocks and my Top Pick is LVMH.  While buying luxury goods could offer me immediate gratification, investing in LVMH could offer me long term growth at discounted valuations. 

A thing of beauty is a joy forever and those who produce such beautiful things are to be treasured. 

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