Techquity
Technology Investor, Fundamental Research
Hermès now trades at its cheapest price-to-free-cash-flow in 10 years, 29.6x against a 47x ten-year median. The main appeal is that it is an easy stock to hold for a very long time. AI makes the world very uncertain and many businesses will change a lot, but people will still want a Hermès bag in 20 years. It is the one portfolio stock that can be held for 20+ years. x.com
Hermès' leather business underpins its resilience because it is the category the company controls most. Its most impressive Q3 result was about 10% organic leather growth while peers struggled; overall growth was 4.3% in Q3 and 5.5% over nine months despite challenges in the Middle East, China and France. The valuation pays for mid-single-digit growth when few luxury peers are growing, with somewhat less upside in a boom. x.com x.com
Ferrari, Hermès and LVMH are the perfect anti-AI investments because the rich, and those who want to be rich, love these brands. x.com
Hermès and LVMH are a tough long pitch at about 30x earnings while the luxury slump stays broad-based. Per alphaportai, LVMH's business units are struggling across spirits, leather goods and perfume. Hermès is a little better and looks to be taking some share in leather goods. Buying luxury when it is distressed would be appealing, and this is not a reason to short Bernard Arnault, but a 30 P/E is hard to accept. x.com x.com x.com
Ferrari remains expensive because bulls ignored its capitalized R&D, overstating free cash flow. At the peak the stock traded near a 1% FCF yield, and dividends plus buybacks only ever covered about half the quoted FCF, leaving some €400M unexplained. Even at about 25x FCF it would be only cheap-ish when TransDigm or Moody's, growing 6-8% for years, trade at 25-30x, and Ferrari is still materially above that despite a 43% drawdown, its largest ever, per @Fiscal_ai. x.com x.com x.com
McDonald's, Reddit, Uber, Hermès, Constellation Software, ServiceNow and Fair Isaac are high-quality companies trading near their lowest valuations ever. x.com x.com x.com x.com x.com x.com x.com
LVMH deserves another look now that sentiment has turned against luxury and its brand moat, leaving the stock at about 15x earnings. x.com
Swatch Group is cheap on the balance sheet but expensive on the income statement, which is why the stock has gone nowhere for fifteen years. Inventory, real estate and cash alone exceed its market cap, and gross margins near 80% show real brand pricing power. But high fixed costs from vertical integration and heavy reliance on one country cut net margin from 13% in 2015 to 0.25% in 2025. Hype launches like MoonSwatch and the AP Royal Pop, which crashed 72% on resale, do not move earnings. x.com … Show more
Apple no longer clearly fits as a long-term holding, because its scarcity-driven position is in doubt. It is unclear whether Apple can keep its market position in the AI industry, and single-digit growth struggles to justify a 40x valuation. Long-term investing should favor businesses with near-unassailable scarcity, such as some mines, or durable supply-chain advantages. x.com
LVMH may struggle to fix its problems because Louis Vuitton, a key brand, is losing its appeal. Gen Z and aspirational buyers are no longer interested in entry-level LV leather goods, and anecdotally the top 1% now view the brand poorly. Fashion and Leather Goods organic growth was -1% in H1 2026, with sequential declines in Asia and Europe; Dior is still doing well. @MRougemont counters that it is a Europe problem, with new LV products selling well in the US. x.com x.com x.com x.com x.com
