MS 长期基本面强劲，但当前估值过高；倾向于仅在估值倍数大幅压缩或市场情绪转弱后再买入。

I mean we talked about all of the tech founders who become you know billionaires and then they sort of are more careful with what they say publicly. I think that's part of it, but more importantly, you have actual economic problems as we discussed.

And even if they don't necessarily hit the top 1% or at least they hit them much less, it is sort of a different animal if you actually have a problem in the economy. And then beyond that, the recovery from 2016 was primarily again driven by a wave of new customers which were the millennials.

And if you compare that to today, I just don't see that sort of wave of new customers. And maybe the last point, even if you have the money and that's similar to 2013 and you could go out and buy it, if the entire country is sort of in an economic crisis and you have the philosophy of the CCP and in China generally, probably if you're the top 1%, you don't go out and buy a record amount of Birken bags even if you can.

And this is once again an argument for investing in brands that serve the top of the top because those are the consumers that will still go for international brands. Maybe not exclusively, but they certainly did not stop buying from Hermes, for example.

But many LVMH brands did not enjoy that same customer sickness.

I feel like what happened to Jack Mah a couple of years ago was it changed not only to how people outside of China perceived the policy but even people inside of China. I think Jack Mah basically overstepped at a time where even a lot of founders in the country thought that China is more capitalistic than it wants to admit it is and that basically these multi-billionaire founders have a lot of say in how the economy should do. after Jack Mah happened sort of people know that they don't have as much of a say as they thought and to me also I got to admit it very much show that you called it suffering from success which I think is kind of fitting for this the more successful a company gets the harder it is to invest and that's usually when the compounding happens right I mean when we talk about MS for example the best moment to invest in this company has been when it's established as a top tier luxury brand when it's you know doing business can grow 10% a year and just compound and that's increasingly difficult if you operate in a market where exactly that success sort of gets you into the quares which again is something that probably a lot of people should have known.

The problem though is that that region is basically the one everybody was counting on going into 2026 knowing that China struggles and MS grew there last year. I think it was about 15% and the other companies were growing quite good as well.

So they thought this might be the country or sort of the region that basically balances out China. But it's not only about that region. Generally, the Gulf customers are also important for European sales, especially in cities like Paris, London, and Milan because when it's, you know, 45° C at home, it's a nice little change, I've heard, to make their way to Europe and then spend money at LVMH or MS in those cities.

And in France alone, sales dropped 3% in the first quarter for MS. And to a large extent, that's because that customer base basically wasn't there anymore.

probably if we for example talk about tariffs once again it's primarily hitting the aspirational buyers right if you as rich as most of the MS customers are you would also not care if you have to pay a bit more because of tariffs it sort of adds to the fact that fewer people can actually buy those goods which in luxury is always a good thing but especially for the companies what has not been A good thing is the currency situation, but 80% of a massive sales are outside of the Euro zone and nearly all of its costs are in France.

So basically in Euros. So LVMH is I think obviously in a similar situation being a global brand but operating in France. So when the euro strengthens as it did for most of the last 18 months, which I also know because I get paid in dollars but I spend in euros that is not pretty good, right?

And the euro was basically getting stronger against every other currency that you can compare it against. And that's YMS grew 6% at constant currency which is still quite strong mids single digit in the first half but only 1.6 reported.

So significantly weaker and that's also you know while LVMH's reported revenue fell 3% while the underlying business grew 2%. So I think that's a pretty severe impact that one should at least think about when you look at the numbers of those companies.

And on the profit side it only gets worse because the costs don't shrink with the revenue. So, LVMH lost about €700 million of operating profit to currency in the first half alone and expects that this will be a billion for the entire year.

Yeah, I think it's time and I would say we start with MS. When I first did a model or built the model for MS, I mostly varied the exit multiple for each case because you know you have a base case, you have a bull case, you have a bare case and I mainly wanted to show the risk of investing in a company that was trading at back then a multiple in the 40s which is obviously quite high and I would say that worked out quite well since a big part of the stock's decline that we've seen in the last couple of months was due to the multiple going down from the 40s to the low 30s.

severe let's call it 20 30% draw down just in the multiple and now I thought I wanted to test something else so this time I assumed the exit multiple would actually remain stable at where it is right now which is 32 times and then the only thing I changed were the growth rates for the top line and then the margin assumptions so in my base case I expected 7 to 8% revenue kga until the end of the decade and then growth in the next two years is likely going to be in the mid singledigit range so not that much but I do expect high single digit to low double-digit growth if we talk about 2028, 2029, 2030.

So that's when I have to assume that the cycle is ending and then MS is very stable when it comes to margin increases. Even now in this bad time, the margin as we said earlier didn't go below 40%.

So assuming we see slight increases there in the future, I personally have EPS to go at a cake of about 10%. And then we can also not forget about the dividend that MS is paying.

So while the yield is low, which is something that we discussed last time that we pitched it, it is growing quite quickly and significantly, and so it can add at least a bit, let's say half a percentage point to your return.

So long story short, at a price of about €1,300 per share, I think we could expect 12 to 13% return given these assumptions and we are at €1,400 right now. That's basically where we're standing.

Whereas when I think about MS I think it will get better over time. And I also think that the growth outlook for the top 1% will become better and better. Maybe it's not growing at 8 to 9% for the next 10 20 years.

But even if we get to mids single digits, that's something that I definitely prefer over the 1% that we've seen in the aspirational buyers.

So long story short, I think MS just proves to be a better company in the long term and it has been growing for the longest time. So if I would want to buy a company, it would be a mess.

But I should say that I'm just looking for the time and I don't think it's here yet where there's actually blood in the streets as Buffett would say and I don't know 25 times earnings I don't think it's there yet.

MSU is still paying 30 plus times earnings. So I think I would want to buy it when I actually feel like the sentiment around is is not good anymore and people are not telling you hey let's look at LVMH let's look at MS they are at historical lows and the quality is still there.

I think I look for a bit more of let's say a trumble in what they're actually experiencing.

I got to admit, I generally thought when I started looking into these companies and I told you that I will, you know, be covering LVMH and MS again that I would find something that gets me more excited than it actually did.

Like I looked at all of the numbers. I looked at the stories. I also listened back to original episodes and I think it all makes a lot of sense. But I just couldn't find anything that got me really excited about the outlook, especially for the next couple of years.

And I think the problem that I found is I want to buy them at a point and I said that before when no one is calling them a great opportunity anymore when they are actually trading at cash flow multiples that are in let's say 20 times for a mass for example right and at the same time I think about what would need to happen for a mass to trade at such a 20x multiple and it would probably be so bad that the entire thesis for buying a mass is gone at that point right I don't know if that would mean that the brand for example would have to suffer significantly and how that could look like Maybe just an example, it will never happen.

But let's say they open up a fair break in, let's say, Vietnam, right? They're basically shifting the heart of what they do in France to some other country. There has to be something so significant that I almost can't imagine that it wouldn't materially take away from, you know, the brand value to a larger extent that as we know from Little Lemon, that's not the game we want to play anymore.

Investing in a brand, especially a fashion brand, that is not doing as well anymore. And the optimal scenario obviously would be that there's a major crash, you know, a macro crash that just sweeps a company like MS with without actually the brand getting hurt.

But even then, I'm sort of asking myself, there would likely be so many bad opportunities in such a big crash outside of luxury and fashion and MS that I probably would still buy other companies.

Maybe it's just that after looking at Nike, Lululemon, you know, Monontlair, which is a company we covered too, and now LVMH and MS, maybe the fashion space is just not for the two of us.

MS is probably the most valuable brand in the world, but you also have to pay a hefty multiple to call yourself an owner of MS. And anyone who knows us knows that usually we stay away from stocks this expensive.

But I have never seen a company that was able to maintain such a high valuation multiple over so many years. I guess it's telling that their popular Birkin bags literally outperformed the market in most other asset classes over the last few decades.

But one stock they could outperform is MS itself.