Two years ago I started this financial blog, and even though I only put up two posts before life stepped in and got me distracted, they still received some interesting comments. So it seems, I should continue.
My ‘Big Idea’ was this quote from Alexander Woollcott, that stated :
All the things I really like to do are either illegal, immoral, or fattening.
And I still think it was one of those absolute truths that will never be debunked. But it is not complete. Woolcott was a bit to nice I think, and had to much confidence in humanity. I believe we should add: ‘or will make my neighbour envious’. Because so much consumer behaviour is fueled by the desire to have a nicer car than the neighbours, nicer clothes, to just be…better. And for the world to see it. So the investment strategy I want to test would become:
All the things I really like to do are either illegal, immoral, fattening, or will make my neighbours green with envy.
Of course, this assumes that the most profitable companies are the ones that rely on consumer spending. That makes it cyclical, and risky. But if you look at long term investing, and have solid nerves, I think it will make you a lot of money.
So, it is time to set up a virtual portfolio, and do some shopping! I’ve decided to use the virtual portfolio options that eToro give me, since I like it’s layout. And let’s begin with getting some stocks in the first area…or should we say vice?
Alcohol
Rémy Cointreau SA (RCO.PA)
French, prestigious…what else do I need to say? This classic had pedigree, and a loyal customer base. And it is appealing to younger audience because it is a favorite in the urban/rap scene. If you are somebody in a club VIP section, you order a bottle or Remy so everybody can see you can do it. If you make a video clip, you need a bottle of Remy in it.
And it is of course not the only brand the company sells, with Louis XIII, Cointreau, Metaxa and their other brands, they have a diverse portfolio. People will buy these products for a long time to come.
Constellation Brands, Inc. (NYSE:STZ)
Now, if we talk about fattening, we must have a beer company. So I take the biggest, and it also gives me an extra bonus. With their stake in Canopy, they qualify as the ‘illegal’ choice. Or ‘used to be illegal’, but there are enough places where weed consumables are still illegal, so it will do!
LVMH Moët Hennessy – Louis Vuitton (MC.PA)
I get one of the most famous Champagnes, an iconic Cognac and high end fashion/lifestyle products in one buy. I have to have this. There can be no discussion about it!
So, let’s go shopping…
I will take 1000$ as a start investments in my choices the coming weeks, until I feel I have the right selection. I will analyze what they did every week…and we will see. I believe in buy and hold, and let quality stocks do their thing. It is what I do in my real portfolio. I do not have the time or the expertise to try and ‘time the market’ or whatever. If 2023 will be a regression year, as some say, this luxury portfolio might look like a big bust for a while. We will see!