In late November, Louis Vuitton Moet Hennessey (OTC:LVMH) announced the acquisition of Tiffany & Co. (NYSE:TIF), a move which apparently impressed investors, as the stock price of LVMH has continued to rise in recent months.
The acquisition amounted to a significant premium of approximately 50% over the company’s stock price in late October, a move that did not jar LVMH investors whatsoever.
A conglomerate of luxury brands, LVMH is available to North American investors through the over the counter, or pink sheet, exchange. This European company has continued to engage in acquisitions to build its business, banking on diversification across various luxury sectors will smooth out any rockiness with respect to an individual sector or brand.
For any North American investor, seeking out European companies, or those who can provide geographical diversification, is a great idea; a "home bias" can exist among many investors, and to some extent this makes sense – most investors want to invest in what they know, a mantra famed investor Warren Buffett has promoted for decades.
That being said, venturing outside of the comfortable confines of one’s expertise into companies like LVMH, even for a small portion of one’s portfolio, can broaden one’s perspective on global issues and add new options to consider, beyond the common companies most investors look at here in North America.
As with any investment, readers should consult an investment advisor before making any investing decisions and do the appropriate homework on companies like LVMH.
Invest wisely, my friends.
