Eureka Report published an article on 6th July titled "The Luxury Goods Market and LVMH" in which author Elizabeth Moran picks over some numbers from a recently released industry research report. A key excerpt from the article:

Apart from Cettire selling goods from a number of the named top brands as well as a boat load of other high end brands, the estimate of 33% of sales being online by 2030 combined with Cettire's growing global reach (including significant growth in Asian countries) and lower prices bodes well. Certainly better than I've been assuming to date.

I sold a smidge under 30% of my holding at $3.29 (only to watch the SP continue it's march up to above $3.50, doh!) but am more inclined than I was to just HODL and see where this ride takes me over the next few years...

CTT's SP rollercoaster rivals PNV's!

2 months on since my #3Q23 Trading Update straw and my conclusion that the valuation isn't yet what I would consider to be insane is being stretched... ok ok, heaved into a dumpster, doused in petrol and set on fire.

On it's upward march towards the $2.50 level, I saw a reference to CTT on a Livewire Markets "Charts of the Week" story which stated:

It’s the steady climb that we’re interested in and highlighted on the chart above. It’s a solid uptrend, where the dips have been met with support, whilst average volume has been picking up through the most recent part of the rally. The $2 round number has been tested and confirmed multiple times and it seems the bulls are now clear of this level.

I have devoted zero energy to learning about trading and charting (as opposed to valuation and the psychology of investing), but gee whiz do the traders move the SP, which today closed at $3.11 - more than double in 2 months. We're well into irrational SP territory to my mind, and the recent daily swings of typically double-digit percentage SP movement for a discretionary retail stock on no news defy belief to me as a non-trader.

Per my previous straw, I don't hold because of a high degree of conviction in the long term outlook and I'm most certainly not a fashionista who fully appreciates the range of products sold on the platform, yet the business metrics are all good so I don't think it makes sense to sell out entirely.

To my mind, the $3+ SP represents significant downside valuation risk, so I'm planning to trim somewhere between a quarter and a third of my position to recoup invested capital + some profit to reinvest in the wide range of interesting alternative options that exist currently after all the tax loss selling.

Cettire just dropped another impressive trading update. The headline numbers look great and continue to do everything I hoped they would (and then some):

I find myself in the extremely fortunate yet discombobulating situation of trying to decide what to do at this juncture.

For context, I started buying CTT while it was trading below $1 last year and my "investment thesis" was pretty flimsy at the time, consisting of a combination of mostly qualitative thoughts about the business and SP:

• Explosive revenue growth for luxury goods with an enormous global market
• Emerging global foothold
• Ability to easily control key costs as desired (or demanded), which has been demonstrated to great effect in recent quarters
• Founder selling (I considered to be entirely reasonable) turbocharged the sell off
• Any argy-bargy with brands not liking their goods being sold as grey market items would not come to a head in the near-medium term.
• My expectation that a luxury goods focus may weather an economic storm ok because the customer base tends to have a high degree of disposable income

My valuation "work" was equally flimsy and ultimately based on some digestion of forward estimates + peer comparison + simple multiples scenarios, at which point I concluded "it's probably going to be worth more than $1 soon" i.e. more of a "it's better to be approximately right than exactly wrong" type approach.

There is certainly a niggle that things are at, or close to being, as good as they'll get for a while which suggests it's time to aggressively trim. But then on the other shoulder is the voice saying to let your winners run, especially when the numbers say everything is going well and there's no significant deterioration yet i.e. don't box at shadows.

At current $2+ prices I won't be adding to my position, but any future excursions back below $1.50 territory which I've resisted over the past ~6 months may prove irresistible given today's update.

The valuation isn't yet what I would consider to be insane, so I'll probably continue to hold, but my finger is metaphorically getting itchy hovering over the sell button.

[Held IRL]

Been a while since I checked Google Trends:

It's unfortunate that China is a black hole to Google, but trend generally looks ok to me, some volatility + seasonality not withstanding, and there's clear evidence that they're expanding consumer awareness + geographic reach despite their pivot to moderating their marketing spend. Fashionistas are everywhere it seems!

[Held IRL]

Nice HY results from Cettire. Will their sales hold up over the next 1-2 years is the question on my mind though...

The sorts of consumers buying from them don't strike me as folk who will have to stop buying because interest rates have gone up a few percentage points or the price of their dream handbag went up 20% i.e. my current expectation is that even though Cettire's growth may moderate, perhaps quite substantially, I wouldn't expect them to start going backwards suddenly either.

Some more pondering to be done, but happy to hold for the moment...