72 episodes

Business Breakdowns is a series of conversations with investors and operators diving deep into a single business. For each business, we explore its history, its business model, its competitive advantages, and what makes it tick. Learn more and stay up to date at www.joincolossus.com

Business Breakdowns Colossus

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Business Breakdowns is a series of conversations with investors and operators diving deep into a single business. For each business, we explore its history, its business model, its competitive advantages, and what makes it tick. Learn more and stay up to date at www.joincolossus.com

    LVMH: The Wolf in Cashmere’s Conglomerate

    LVMH: The Wolf in Cashmere’s Conglomerate

    This is Zack Fuss, an investor at Irenic Capital Management. Today we’re breaking down the world’s largest luxury business, LVMH. The LVMH story is deeply reflective of the vision of its 73 year-old founder and architect, Bernard Arnault. Today, the business generates €75 billion in sales across its 75 brands and 3 sector focuses. With a market cap of €350 billion, LVMH is not only the largest luxury business in the world but one of the largest businesses in the entire world. 
     
    To break down LVMH, I’m joined by Christian Billinger, the chairman of Billinger Förvaltnings. We discuss the paradox between scarcity and scale in the luxury industry, analyze some of the company’s high profile acquisitions, and delve into the history of this conglomerate’s famous founder. Please enjoy this breakdown of LVMH.  
     
    For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
     
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    This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
     
    -----
     
    This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it’s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.
     
    —--
     
    Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
     
    Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
     
    Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt
     
    Show Notes
    [00:03:30] - [First question] - How LVMH came to be and Bernard Arnault’s history
    [00:08:56] - Spread of revenue and margins across their various brands
    [00:13:38] - What it is about their business that has allowed them to achieve such tremendous scale given the scarcity of luxury goods
    [00:16:06] - Examples of Arnault reinvesting in the business for the long-term
    [00:17:04] - Ways all of their brands and different verticals work together to create value
    [00:18:56] - What the general view on success is after Arnault steps down 
    [00:21:19] - Key factors that allow luxury houses to enjoy handsome returns on capital historically
    [00:23:17] - What he’s noticed about luxury brands and their ability to redeploy capital 
    [00:26:25] - How their capital allocation strategy manifests in their financial profile
    [00:28:24] - The Arnault family’s control over LVMH
    [00:31:48] - The evolution of the industry in Europe and the strong getting stronger 
    [00:33:58] - Cultural differences internationally that allow some countries to thrive in luxury brands compared to others like the US
    [00:36:17] - Thoughts on the influence of the Chinese consumer on European luxury houses
    [00:40:30] - What has characterized their M&A strategy historically
    [00:44:08] - Overview of their recent acquisitions and what it means for LVMH going forward
    [00:47:46] - Their go-to-market strategy to acquire customers and build the brand
    [00:48:11] - Some of LVMH’s vulnerabilities and risks 
    [00:50:44] - Key takeaways for investors and operators when studying LVMH’s story 

    • 53 min
    DuPont: Two Centuries of Chemistry

    DuPont: Two Centuries of Chemistry

    This is Matt Reustle and today we are breaking down DuPont. We admire leaders that are in the trenches with their team members; never above any task and willing to share in risks. But, wow, did the Dupont family set a standard in that category. Whether it was Pierre Samuel Du Pont's 1818 death fighting a fire at their powder mill, Alexis Du Pont’s 1857 death in an explosion at a powder yard, or Lammot Du Pont’s famous 1884 death in an explosion while experimenting with nitroglycerines. The Du Pont family pushed the limits.
     
    In the 1900s the company evolved away from their roots in gunpowder and dynamite and it's hard to find an industry they haven’t touched since then. To break down DuPont, we are joined by Seth Goldstein from Morningstar. Seth covers what separates commodity chemicals from specialty chemicals, we get some quick chemistry lessons on what's happening to create these well-known products like Nylon and Tyvek, and why after all of the years as a behemoth in the industry, DuPont has "unbundled" into several independent companies. Please enjoy our Breakdown of DuPont. 
     
    For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
     
    -----
     
    This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
     
    -----
     
    This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it’s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.
     
    —--
     
    Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
     
    Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
     
    Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt
     
    Show Notes
    [00:03:38] - [First question] - Key products that define Dupont’s history and where their products show up in our everyday lives
    [00:06:23] - The science that goes into developing their products and what being a speciality chemicals business looks like
    [00:08:22] - Where they’re sourcing commodity chemicals from 
    [00:10:30] - The thought process that went into their merger with Dow in December 2015
    [00:13:21] - Commodity chemicals versus speciality chemicals
    [00:16:01] - The importance of patents and early products that first had them
    [00:17:38] - How much effort is put into research and development today
    [00:19:47] - Their economic model and profile and current businesses
    [00:23:56] - How their EBITDA margins today compare to the business historically
    [00:25:27] - Overview and duration of their merger supply agreements
    [00:26:23] - The seasonality and customer base for a business like this
    [00:27:52] - Producing on a per-order basis or on market speculation
    [00:30:04] - How many of their chemicals are produced in their own manufacturing facilities
    [00:31:00] - Stability and internal investment of their cash flow cycle
    [00:32:28] - History of the Dupont family and key leadership changes
    [00:34:24] - Thoughts on the bull case for Dupont that will put them back on the pedestal 
    [00:36:28] - The percentage

    • 49 min
    Charles Schwab: The 8 Trillion Dollar Gorilla

    Charles Schwab: The 8 Trillion Dollar Gorilla

    This is Matt Reustle and today we are breaking down the financial institution known as Charles Schwab. Schwab is a financial behemoth. They report over $8 trillion in assets under custody and a market cap scratching $120 billion but I think the most fascinating part about this breakdown is the strategic pivot taken by Schwab. While the online brokerage market has been decimated in recent years from fee compression, Schwab has been pivoting their business model to that of a traditional bank. Now what does that mean? Today, Schwab makes the majority of their money earning interest on customer cash deposits. 
     
    To break down Schwab, I am joined by Holland Advisors’ Founder and Portfolio Manager, Andrew Hollingworth. Andrew has written extensively on Schwab, which we link to in our show notes. We cover what it means to operate as a bank vs online broker, how Charles Schwab himself grew this business out of a newsletter, and what’s on the horizon for Schwab in the future. We hope you enjoy this breakdown of Charles Schwab.
     
    For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
     
    -----
     
    This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
     
    -----
     
    This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it’s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.
     
    —--
     
    Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
     
    Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
     
    Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt
     
    Show Notes
    [00:03:30] - [First question] - Why Schwab isn’t well understood by the market 
    [00:05:18] - The story of Charles Schwab and how active he is in the company 
    [00:08:13] - The business model of Schwab itself; Holland Advisors Research
    [00:12:51] - Can it be compared to a franchise model; Another Flywheel
    [00:15:46] - What did they see in the space that convinced them to shift their business model
    [00:18:19] - How Schwab benefits from their customers keeping money in cash
    [00:20:18] - What stops competitors from copying the Schwab model
    [00:23:12] - Where Schwab stands out with cash on the balance sheet
    [00:24:17] - The reasoning behind the TD Ameritrade acquisition
    [00:30:38] - The Schwab customer base 
    [00:33:28] - Convincing new customers to transfer their accounts to Schwab
    [00:37:14] - How their market share has changed over the years
    [00:38:50] - Building their balance sheet 
    [00:46:34] - How their acquisition of TD Ameritrade helps their balance sheet
    [00:49:50] - Valuing a complex business like Schwab
    [00:56:43] - Key drivers of their earnings growth 
    [00:58:31] - How they use their net interest margin 
    [01:00:43] - What the market pullback this year has meant for Schwab
    [01:03:43] - Major lessons learned from analyzing Schwab

    • 1 hr 7 min
    Rolex: Timeless Excellence

    Rolex: Timeless Excellence

    Today, we’re breaking down one of the strongest brands in the world - Rolex. Founded in the UK in 1905 under the name Wilsdorf & Davis, Rolex has become the leading name in luxury watches. But, while the company’s products are iconic, the business itself is highly secretive. Owned by a Foundation and run as a non-profit entity, little is known about Rolex.
     
    To unlock the secrets, we are delighted to be joined by Ben Clymer, founder of HODINKEE, and an expert on all things luxury watches. Ben has had rare access to Rolex and the people behind the manufacturer, making him the perfect person to dissect this business with us. Please enjoy this excellent Breakdown of Rolex.
     
    For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
     
    -----
     
    This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
     
    -----
     
    This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it’s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.
     
    —--
     
    Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
     
    Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
     
    Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss
     
    Show Notes
    [00:03:01] - [First question] - Ben's favorite Rolex watch ever; Ben's Inside Rolex piece
    [00:04:24] - What makes the Rolex Daytona such a special watch 
    [00:07:19] - The job-to-be-done for high-end watches beyond just telling them the time
    [00:12:18] - The strategy behind marketing luxury products; The Luxury Strategy
    [00:14:34] - An overview of Rolex's business
    [00:19:38] - The history of Rolex 
    [00:38:45] - Their genius in marketing and distribution 
    [00:41:55] - How they make decisions and what others can learn from them
    [00:47:14] - The financials of Rolex and other luxury watch brands
    [00:49:02} - Most important business lessons others can learn from Rolex
    [00:52:54] - Other luxury brands worth studying 
    [00:57:26] - What Rolex hasn't gotten right

    • 1 hr 2 min
    Dino Polska: Serving Small-Town Poland

    Dino Polska: Serving Small-Town Poland

    This is Matt Reustle and today we are breaking down Polish grocer, Dino Polska. This wasn't a name on our radar at Colossus but the more we dug into the story, the more intrigued we became. It starts at the macro level in Poland, a country that transitioned away from communism in 1990 so the oldest private businesses are just north of 30 years old. And on a micro level, Dino operates a rigid playbook where they target small towns and replicate the same format store, which drives better efficiency and allows them to reinvest into new locations.
     
    To break down Dino I am joined by Jon Cukierwar of Sohra Peak Capital Partners. Jon wrote an extensive presentation of Dino which can be found on our website. We break down the unique dynamics of the Polish consumer, how Dino differentiates from its competitors, and Dino's founder of mystery Tomasz Biernacki. Please enjoy this breakdown of Dino Polska.
     
    For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
     
    -----
     
    This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
     
    -----
     
    This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it’s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.
     
    —--
     
    Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
     
    Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
     
    Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss
     
    Show Notes
    [00:03:21] - [First question] - The fall of communism in the 1990s and how it shaped the business landscape of Poland today 
    [00:05:43] - Dino’s unique and differentiating characteristics as a grocery store 
    [00:08:55] - The current market landscape of superstores, proximity, and mom and pop grocers in Poland 
    [00:12:36] - The size and scale of Dino as a business today  
    [00:14:01] - Key players and main events in Dino’s history
    [00:20:03] - Where Dino’s margins fall relative to their competitors
    [00:22:47] - Their relationship to the construction side of their business
    [00:26:34] - The payback period of a new Dino store and how long until they reach maturity
    [00:29:09] - Owned land and other factors in their real estate strategy
    [00:31:10] - How much of their accessible market opportunity has been seized and their potential growth rate over the coming years
    [00:34:20] - What their growth rate would have to be to ensure they reach their projected scale
    [00:36:23] - How he values grocers as an investor in both Poland and the US
    [00:38:12] - Cyclicality in revenue streams and what impacts them
    [00:40:26] - Ways Dino finances their growth and if any capital has been given back to shareholders in dividends
    [00:42:13] - Potential risks and threats to their business
    [00:45:10] - How he grew and built conviction with risks in an emerging market
    [00:47:48] - The main lessons he’s learned from studying Dino Polska

    • 48 min
    Berkshire Hathaway: The Incomparable Compounder

    Berkshire Hathaway: The Incomparable Compounder

    Today’s business needs little introduction. Berkshire Hathaway is one of the largest businesses in the world and run by arguably the most famous investors of our time, Warren Buffett and Charlie Munger. 
    To break down the business, I’m joined by Chris Bloomstran. Chris is the President and CIO of Semper Augustus and has gone as deep on Berkshire as anyone I’ve ever encountered, making him the perfect person to do this with. Given the reams of excellent content already out there about Buffett and Berkshire, we focused our conversation on the specific elements that make this business so special. Please enjoy this breakdown of Berkshire Hathaway.
     
    For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
     
    -----
     
    This episode is presented by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Listeners are invited to try Visible Alpha for free by visiting visiblealpha.com/breakdowns
     
    -----
     
    This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database - Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.
     
    —--
     
    Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
     
    Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
     
    Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss
     
    Show Notes
    [00:02:26] - [First question] - What Berkshire has taught the world about float
    [00:14:00] - How much of Berkshire's success was predicated on insurance 
    [00:23:17] - Whether or not Berkshire’s capital source has been more important than stock selection 
    [00:30:04] - Why there’s such a disparity between good stock pickers and holding companies
    [00:36:24] - What the major signposts of durability are when evaluating companies
    [00:38:29] - Acquiring Alleghany and using that as a case study that reflects their values
    [00:47:22] - The role that energy has played in Berkshire’s growth 
    [00:59:54] - Thoughts about the major pieces of Berkshire and the future of the company 
    [01:05:46] - Important lessons learned about investing and business from Berkshire’s story

    • 1 hr 14 min

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