Molson Hart

Thirteen years ago, Ford launched his eponymous brand and it now earns $2 billion in sales at retail. Would it have been completely crazy to invest in his new enterprise on Day 1 in 2006? Maybe, but I observed an interesting tidbit: When Ford launched his brand, he now freely...

admits, he was already a has-been in the hyper-trend-conscious world of luxury fashion. Chanel developed similarly: The brand DNA you recognize as "Chanel," and that's now among the most valuable brands on earth, developed after World War II, when Coco Chanel was in her 60s...

...and something of a laughingstock for just churning out the same dress year after year for rich matrons. It's an interesting paradox, but you see things differently when you look at industries through the eyes of a value investor.

I don't have a good sense of the stability of these brands. "Buy a business that an idiot could run, because eventually one will." Is luxury a business that an idiot could run?

That's a good point, but there are a couple of, seemingly talented, families like the Arnault's who snap up luxury brands when they fall on hard times. If the Arnault's weren't so talented, how many of these businesses would be sustainable? I don't know.