THE GHOST TRAIN
THE FINANCE GHOST: The LVMH premium is no longer luxurious
LVMH becomes harder to justify as a long position as it opts for growth in affluent rather than exclusive markets
As I watched Ferrari fail to finish on the podium at the Emilia-Romagna Grand Prix at Imola (as the name suggests, a race where the stands were filled with wildly passionate Italian Ferrari fans), I was reminded that for all the glitz and glamour in the sport, the Ferrari share price has zero correlation with the Formula One team performance. They haven’t won a world championship since 2007, yet the Ferrari share price is up more than 780% since the IPO in 2015.
There’s a simple reason for this: Ferrari’s wealthiest customers don’t care about Formula One results. The most valuable customers are the ones who pay a fortune for highly personalised models — and those customers care about one thing and one thing only: exclusivity...
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