IN THIS EPISODE, YOU’LL LEARN:

• A business overview of Hermès.
• Examples of Hermès thinking exceptionally long-term in their business strategy.
• The attempted takeover of Bernard Arnault.
• The strength of Hermès’ moat.
• The growth opportunities ahead for Hermès and the luxury industry more broadly.
• How Hermès approaches capital allocation.
• Shree’s thoughts on Hermès’ valuation.
• Risks that investors should monitor for Hermès.
• And so much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Clay Finck: On today’s episode, I’m joined by Shree Viswanathan for a stock deep dive on Hermes. Shree owns Hermes and his fund SVN Capital, and he takes a long term, concentrated, patient approach to investing in public equities. Hermes is one of the most valuable luxury brands in the world, renowned for its high quality craftsmanship and rich heritage.

[00:00:21] Clay Finck: The brand is known for its iconic products such as the Birkin and Kelly bags, silk scarves, and horse related items. Since the IPO in 1993, shares of Hermes have compounded at 20.6 percent excluding dividends, while the S&P 500 has had a total return of just 10.4 percent over the same period. Hermes was founded in 1837, and it’s still managed by the founding family who owns 67 percent of the shares.

[00:00:50] Clay Finck: These shares are controlled by three branches of the founding family, and combined, the shares are worth roughly 155 billion, making them one of the wealthiest families in the world. During this episode, Shree and I give a business overview of Hermes, we share the story of the attempted takeover of Bernard Arnault. We discussed the strength of Hermes moat, the growth opportunities that lie ahead, their approach to capital allocation, their very rich valuation, and the most important risks going forward.

[00:01:21] Clay Finck: This was one of my favorite episodes I’ve recorded on the show, so I really hope you enjoyed as well as Shree shares a ton of fascinating insights during our conversation. Whether you’re interested in Hermes or not, I think there’s a lot we can learn about such a company that can somehow be implemented into our own business or own personal lives in some form or fashion.

[00:01:40] Clay Finck: With that, I bring you today’s episode discussing the luxury icon, Hermes.

[00:01:48] Intro: Celebrating 10 years and more than 150 million downloads. You are listening to The Investor’s Podcast Network. Since 2014, we studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your host, Clay Finck.

[00:02:16] Clay Finck: Welcome to The Investor’s Podcast. I’m your host, Clay Fink. And today I’m happy to welcome back my friend, Shree Viswanathan. Shree, it’s great to have you back on the show.

[00:02:25] Shree Viswanathan: Clay, it’s a pleasure to be back again. Thank you for inviting me and your pronunciation of my last name is perfect. I like that.

[00:02:35] Clay Finck: We do our research here at The Investor’s Podcast.

[00:02:38] Clay Finck: So I’ve really been looking forward to this conversation for quite some time. I actually just visited Austin with a friend back in June and I made it a point to visit a Hermes store because I knew I’d be having this conversation with you. And over the years, I’ve looked at a number of different companies from an investor point of view and just being a host here on the show and doing what I need to do through interviews and such.

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!

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.
• 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.
• 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

CONNECT WITH CLAY

CONNECT WITH SHREE

PROMOTIONS

Check out our latest offer for all The Investor’s Podcast Network listeners!