TIVP027: LVMH (MC): INVESTING IN TRUE LUXURY

W/ SHAWN O’MALLEY & DANIEL MAHNCKE

06 July 2025

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.

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IN THIS EPISODE, YOU’LL LEARN:

  • How Arnault got his start and took control of LVMH.
  • What inspired Arnault to build a luxury conglomerate.
  • How LVMH benefits from economies of scale.
  • Which brands drive business the most.
  • What are the most important markets for luxury goods?
  • What factors matter most in luxury purchases.
  • Whether the backdoor way to buy LVMH shares at a discount is too good to be true.
  • Whether LVMH is fairly valued and whether it’s added to the Intrinsic Value Portfolio.

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] Shawn O’Malley: And the thing with true luxury is that in some cases, the more you raise prices, the more attractive the products actually become, and long term, Louis Vuitton can probably sell more purses at $2,000 than it would if they were priced at $500 because of that luxury positioning I’m describing where the higher price tag signals a whole bunch of things that end up making customers only want to own that item more and at a lower price, the product would fundamentally be less attractive, which is kind of crazy to say because it’s less exclusive and implies that maybe it’s just a premium item and not a true luxury one that comes with all these other status symbols around it.

[00:00:47] Daniel Mahncke: Last week we did our mid-year portfolio with you. So if you missed that episode, I would encourage you to check that out right after today’s episode so you can learn more about the different companies we have invested in after having them covered here on the show and also how we think about sizing those positions.

[00:01:05] Daniel Mahncke: And today, I know that Shawn, you are fresh of the Markel shareholder meeting and attending a dinner with Tom Gayner, so you’re probably full of all kinds of investing wisdom and ideas, and I think you also just went to a Value X conference too, right?

[00:01:21] Shawn O’Malley: It’s definitely been a busy few weeks, Daniel, that’s for sure.

[00:01:24] Shawn O’Malley: But it’s been a ton of fun 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 might show up in the next few weeks.

[00:01:35] Daniel Mahncke: And speaking of which, we’ve got a pretty compelling pick 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.

[00:01:46] Daniel Mahncke: And then as always, we will decide if at current prices, LVMH deserves a place in our intrinsic value portfolio. So I think I’ll just throw it over to you. Where should we get started?

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