Conclusions And Final Thoughts On 'The Cult Of The Luxury Brand'

For the past two months, I have been writing a series of articles for the investing site Seeking Alpha about The Cult of the Luxury Brand, a book about the luxury industry’s rise in Asia. In those articles, I have used a model from the book, the “Spread of Luxury” model, to estimate the future growth of three of the industry’s largest companies: LVMH group, Compagnie Financière Richemont, and Kering SA. Using those growth estimates, I have projected the annualized returns a long term investor in those companies might be able to look forward to.

However, there is much more to Chadha and Husband’s book than the “Spread of Luxury” model. The book offers many interesting insights about the Asian luxury market, drawing upon fields as diverse as history, philosophy, and psychology to do so. Moreover, though the long term returns I have projected for the major companies in the industry have been fairly uninspiring, I feel the underlying reasons behind those returns provide interesting lessons about how the market views those companies and the industry as a whole. (Read More)