Clay Finck

François Rochon compounded at 13.6% annually for 32 years. He says one of his biggest career mistakes was passing on $LVMH. In 2011, during the European crisis, LVMH traded at 15x earnings. Rochon looked at it and thought "it's a little too expensive." It's up 500% since then. He called it "probably one of the best business in the world." He was right. He still didn't buy. 14 years later, he finally pulled the trigger. Rochon added $LVMH as a new position in 2025 below €500. Here's his thesis from his recent conversation on the We Study Billionaires podcast with @Clay_Finck (1) Brand desirability is the moat. Not this quarter's revenue. "What you really want is the brand, the name still resonate to clients as quality, something you want to own because it's of quality and also it's a symbol of wealth." That's intact. (2) The slowdown is cyclical, not structural. 2021-2023 was abnormally strong post-COVID demand. The last two years are normalization. (3) Sephora is the hidden gem nobody talks about. 10% of revenue and gaining share against Ulta. Growing fast. (4) Spirits is the weak link. He said it directly. Young people drink less. Secular, not cyclical. But it's a minority of the value. (5) China is a long-term tailwind. GDP per capita growing from a lower base. Ups and downs, but the direction is clear over 10-15 years. (6) The math. He expects earnings to increase 60-70% over 5 years. 10-11% growth plus a 2% dividend. Gets him to his 13% target return. (7) The French tax headwind is temporary. Corporate rate jumped from 28% to 33%. If it reverts, meaningful earnings boost not yet priced in. Rochon identified LVMH as a generational business over 20 years ago. He had it at 15x earnings and passed. He later called it one of his biggest omission errors. Now he's buying at 22x trough earnings because he refuses to make the same error twice. Rationality. Humility. Patience. Those are the three qualities he says matter most in investing. This purchase is all three at once.