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I would rather look for a great horse 1st rather than a great jockey. The jockey just needs to be at a certain level of competence and honesty. Of course it would be great if we can have both.
The performance of horse(business) is usually quite consistent. It usually takes some time for the dynamics to change. It changes quickly only due to unexpected events such as the pandemic or the onslaught of technology that makes the new entrant much better.
THG is somewhat like the glove/mask makers, a sudden surge in demand with supplies being unable to cope. Remember the sky high prices of masks? $20 per box. Now is more like $2? But unlike gloves and masks which are commodity type products and easy to manufacture, luxury watches have much lower supply and many watch makers dont ramp up capacity during a surge in demand. So the downside can be somewhat slowed down and contianed to a certain extent.
What I dont like about the THG business is the fact that it is a niche luxury item and mostly sold to enthusiasts. Market can be fickle when it comes to such things. Even within the watch segment the trends come and go. Earlier period, people desired thicker watches, now from what I understand, the trend is thin. While the segment will always have its buyers, the longer term level of interest and profitability is very much unknown.
The performance of horse(business) is usually quite consistent. It usually takes some time for the dynamics to change. It changes quickly only due to unexpected events such as the pandemic or the onslaught of technology that makes the new entrant much better.
THG is somewhat like the glove/mask makers, a sudden surge in demand with supplies being unable to cope. Remember the sky high prices of masks? $20 per box. Now is more like $2? But unlike gloves and masks which are commodity type products and easy to manufacture, luxury watches have much lower supply and many watch makers dont ramp up capacity during a surge in demand. So the downside can be somewhat slowed down and contianed to a certain extent.
What I dont like about the THG business is the fact that it is a niche luxury item and mostly sold to enthusiasts. Market can be fickle when it comes to such things. Even within the watch segment the trends come and go. Earlier period, people desired thicker watches, now from what I understand, the trend is thin. While the segment will always have its buyers, the longer term level of interest and profitability is very much unknown.