Animal Spirits Podcast - Talk Your Book: Investing in Luxury

Episode Date: October 30, 2023

On today's show, Michael and Ben are joined by Brendan Ahern, CIO of Kraneshares to discuss: the creation of Kraneshares Luxury ETF, demographic trends and utilizing the wealth affect, challenges in investing in international markets, luxury dynamics in a recession, and much more!    Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Past performance is not indicative of future results. The material discussed has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your Book is brought to you by Crane Shares. Go to craneshares.com slash KLXY. That's for the Crane Shares Global Luxury ETF. That's craneshares.com slash KLXY to learn more. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Redhol's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Britholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Sproats with Michael and Ben. Ben, you're a luxury shopper.

No, I was thinking about this. I don't really shop luxury brands at all. You're rejecting luxury like I reject middle age. Embrace it. It's true. What do I do that's luxurious? J crew? See, J. Crew is like... I'm just kidding. That's not luxury. No. But it's hard to define where is the line with luxury brands when it comes to clothes? It's true. I guess a lot of it is...

See, I prefer stuff that doesn't have a name brand on it anywhere. Like, I don't want the name with anything on anything that I own. Unless that's like a sports team or something, I guess. I don't want to see anything written on any of my clothes. Fair? Well, that is fair. I mean, I used to just be pretty much... I'm wearing this right now. I used to be pretty much exclusively Gap t-shirts.

But now I've upgraded to, you know, Instagram shopping. That's your luxury purchases, Instagram. It is interesting. I feel like my wife's not super materialistic, but I will say, I'll admit it. She just bought a super expensive vest. Like, what the hell? Like a vest that was way more expensive than a vest should be. Okay.

I feel handbags for women are a big thing. Like a name brand handbag is a big thing. I don't know, but it obviously, like, luxury has, like, it just like has its claws dug into a lot of people. Like, I feel like when you get money, it's like the keeping up with the Joneses or whatever it is, like people who have money are willing to pay up for name brand items. Listen, I'm not going to luxury shame. I have no problem with luxury.

No, no. I kind of get it. It's one of those things where it's like, gosh, this makes no sense. But everyone else is doing it. So it does make sense. So, but it is. I know, it totally makes sense. I mean, isn't that what money's for?

I'm not saying the purpose of money is to spend on luxury goods, but if it makes you feel good, it's your, the way that you perceive other people's perceptions of you? Yes, it's, it's advertising, right? It's brand advertising. And there's just this, you and I have talked about this for years now. One, I think one of our investment, theses, is that a way to say it? Thesis is.

Thesis is that we've talked about forever is like betting on rich people. spending money. And it's almost like, it feels bad to say like we're betting on wealth inequality, but I think that's just the system that we live in. And it seems like that's a pretty good bet because the wealthy don't change their consumption habits that often because they don't have to. Now, I'm not subject to material as we discussed with Brendan and Hearn, but the fringe or the aspirational wealthy, that's where, right, like the marginal buyer and seller of people that are trying to buy a, I don't know, I was about say a Tiffany bag, but I don't think they make But I feel like that...

A Gucci bag. That aspirational buyer has increased dramatically since the advent of social media. True. Don't even think social media. We even talk about social media. Yeah, I feel like that's been a big part. It's also like it makes people go on more trips because you see people post pictures of these cool places.

And I feel like the aspirational wealthy is another category that is being pushed into this category. For sure. Yeah. Hey, listen. When you're right, you're right, that's a good point. All right. With no more further ado.

Here's Brendan Ahern from Kray Shares talking about the global luxury sector. On today's show, we're joined by Brendan Ahern. Brendan is the chief investment officer at Crane Shares. Brendan, welcome to the show. Thanks for having me, Michael. You know what, I apologize. I feel like that intro is very low energy, which is not like me. So it is a Monday.

It is a Monday. It's a Monday. All right, we're going to talk today about global luxury ETF. I saw an article actually recently in the episode. I actually came out today, that there are now over 10,000 ETFs in the market. So far in October, 42 have been launched. This is a new one. This luxury ETF is launched in September.

I'm actually, I'm surprised that a luxury ETF had not existed, although I guess I'm making an assumption. Is this the first luxury ETF? It's not the first. But where, you know, obviously what we wanted to do is kind of what I think what ETFs are supposed to do, which is to go out and get you this stuff. you're not going to own yourself. So, you know, how we define global luxury is a little bit different from some of the predecessors in the space,

which includes very widely held stocks like Apple and Nike, Tesla, which is only replicating what you already own, either through an individual security or through, you know, your broad U.S. equity exposures. So we wanted to do something a little bit different by trying to go further afield in, you know, garnering exposures that you don't already own. That's a good point. So one of the benefits of ETFs is it gives you the ability to be surgical. To your point, you're trying to create something that's not already loaded into our, you know, index fault in the holdings. Like, for example, this right here, the shirt that I'm wearing, the listener can't say, but this is a luxury gap cotton shirt. I don't see that I don't see gap in your top ten holdings.

No, no. In fact, only one of our top 10 is a U.S. listed company, which is Estee Lauder, which I doubt, you know, many people own as an. individual security. It's a de minimis weight in, you know, U.S. equity benchmarks. The majority of these major companies are going to be French, Swiss, German. I was going to ask about that. So how much of the portfolio, because looking at the holdings, how much of the portfolio is outside the U.S.? So about, you know, 27 percent is U.S. listed in the aggregate. So, you know, you've got, obviously, you know, you know, the majority is non-U.S. And I think, I think even with Within that U.S., you know, obviously 27%, you know, not insignificant, it's more of, you know,

those holdings are not commonly held securities. So it is interesting that 70, more than 70% of the portfolio is international. When you think about what luxury goods are, obviously, you know, supremely high quality, but in addition, it's brands. And a lot of these brands have been around for a long time. Oh, yeah. I mean, Armeis dates back, you know, hundreds of years where it was originally a saddle maker in France. And, you know, certainly, you know, these companies, you know, it's really bespoke.

You know, this is, you kind of have a mass affluent. And then you have this unique, you know, ultra high net worth that, you know, as we've seen, you know, during the pandemic was really immune to economic crisis. You know, these people were a small percentage of the total population or even amongst, you know, rich people, they are very different than the rest of us. I got to admit, there's no way in hell I could have pronounced the company that you just pronounced, or I would have said Hermes, probably. So let's just get that out of the way right now. But is that the idea here that this is a bet on, I guess, almost like wealth inequality in a way, but just rich people getting richer in their consumption patterns. are different than the rest of the world or the rest of the economy in some ways. And it takes a lot to get them to stop spending money.

It's, it's, you know, one of the genesis or the real idea behind crane chairs was, you know, give people the growth element of China, right? You know, K-Web or broader emerging markets, KEMQ, where, you know, 10 plus years ago, 50% of MSCI China, MSCI emerging markets was financials and energy, right? And, you know, you add in industrials, materials, real estate, these benchmarks for China and emerging markets were basically value proxies. And that, that to me is why they underperformed. And so KWeb, KEMQ, right, they give you that small piece of growth within these broader

benchmarks. And that's, that's in, you know, I call it explicit exposure, right? It's, you know, you're explicitly buying EM China stocks. But at the same time, over the last few years, you've seen this dramatic underperformance of non-U.S. stocks relative to U.S. stocks. And you'd say, well, there's implied exposure to emerging markets and to China via U.S. multinationals. And that is true in this luxury space where you have developed market companies that are doing a lot of their revenue in emerging markets. like China. And that's kind of the genesis of KXLY was you can have developed market exposure. So this is, you know, well-known accounting firms and, you know, listing exchanges with, you know, highly regulated, give people the comfort of buying, you know, developed market companies, but are highly geared to EM growth and particularly China, which is very much.

the case is where a lot of this demand for global luxury is coming from. I saw a stat today or recently that the global luxury market, by the way, how big is a global luxury market? It's about 275 billion U.S. in annual sales. Okay. That's a lot of money. So that's 25% above 2019 levels, pre-pandemic levels. And a big reason for that is we learned on some of the recently quarterly calls is there was like what they were calling. I think LVMH called them like aspirational luxury buyers. And that pool of aspirational luxury buyers exploded. And it's probably now contracting. Ben made the point earlier that, you know, the ultra wealthy, they don't change their spending habits dramatically, right? If they want to buy, if they want to buy a prodig or a Gucci bag

or a watch, whatever, they could afford, you know, price is not an object to them. But for the rest of us that are trying to break into that market, those, these are sensitive, these are definitely sensitive buyers. And if the, if the economy softens, they're going to, they're going to pull back immediately on luxury items. Yeah. Yeah. I mean, within that latest LVMH, it's, it's in some of the headlines were like, oh, you know, China, drags. I'm like, where, you know, this was, you know, the U.S. was like two to three percent growth. I mean, I mean, the U.S., and so I think you had this helicopter money, the free stimulus. And a lot of that, you know, went into Xboxes and Bitcoin and, but also, you know, Pelotons and iPhones, but also went into global luxury.

And so it's interesting that China, which was still in lockdown, so China goes from being about a third of global luxury pre-pandemic, that baton gets handed to the U.S. And now China, what's China doing? It's reopening. And a lot of this global luxury that took place in China pre-pandemic was actually on vacations. It was spending that took place when it was outside of China. And so I think you're having the baton being handed back from the U.S. to China as they open things up. And I kind of experienced this, you know, a few weeks ago, I was traveling. in Europe for work and, you know, I took the red eye into Milan and there's some, you know,

ginormous Chinese airline had just landed in these, you know, hundreds of folks getting off that plane, you know, they had to wait in this terrible border line or customs line. You know, in the U.S. you get to a special line. But, but it was just like all, you know, you had all these Chinese tourists are out getting about in Europe for the very first time. You know, I know Michael and Ben, you mentioned when on the last compound show that Josh was out in Las Vegas and he had some crazy globally luxury story and I don't think you actually told what the story was. Well, can you give us an idea of like how much wealth has been created for households in China? Like how many more wealthy people are there now than there were like 30 or 40 years ago? Because that's like the big sea change, right?

Is that it's a lot of new money there. Yeah, yeah. I mean, that's a great, great question, Ben, where, you know, this goes back. to some of our thesis in crane shares was that, you know, in 1980, 20% of China's population lived in cities. And today it's close to 20%. At the same time, the number of Chinese that just make between, you know, $10,000 and $40,000, the percentage of population, that's increased by 10x to now 50% of their population makes between $20,000. 10 and 40,000.

Wait, is that good? Those aren't luxury buyers. Definitely not. It just shows that this urbanization has created this growing urban middle class and, you know, and then then apply it to something like, well, what about the rich people? And that's where I think a lot of people would be surprised that there's actually, you know, the U.S. is definitely number one for billionaires. But who would think that the city with like the fifth largest number of billionaires is Beijing, followed by Shanghai, followed by, you know.

Hartford. Yeah, well, I don't know about Hartford. But, you know, you have this wealth effect has taken place in China, disposable income increasing very, very dramatically. And specific to rich people, you know, it's, it's, it is a really, really meaningful effect in terms of the number of, you know, one of the studies that, you know, I've read was around the number of people who have more than a hundred million and by city. And it's New York, you know, the Bay Area, L.A., London, but then it's it's Beijing. It's Shanghai, Singapore, Hong Kong. And so, so it's, it's, it's, it's a real, real effect of, you know, China going to, you know, what's happened on its way to becoming the second largest economy in the world. So on the most recent quarterly call from LVMH, United States growth has slowed dramatically.

Now I'm guessing that the U.S. is a relatively small consumer of their overall pie, although I don't have that number. Oh, here it is. It's big. It's big. It's 24%. So, in fact, you could delete what I just said from your memory. United States is a quota of their business.

But some of the huge growth, so Japan's only 7% of their business, but they've had 31% growth there. So pretty massive. Asia X Japan, which I'm guessing is primarily China, is 32% of their business. And it's grown, looks like 19% in the nine months, in the most recent nine months. So pretty explosive growth there as well, as you just mentioned. Yeah, yeah, yeah. for LVMH, a part of...

That's for LVMH. Yeah, which is, which is definitely, you know, the big one. You know, it's interesting for LVMH in the U.S., a lot of it is, you know, some of it is liquor and wine and not necessarily luxury goods. That's right. They did mention that a big part of the slowdown was in the liquor liqueur and the spirits, the spirits department. And most people probably don't realize he's the, I think, He flip-flops or runs from out of the Elon Musk, but he's the second richest guy in the world. Yeah.

Right? So that speaks to the power of luxury. So obviously luxury is a, well, it's a, I don't know how different segments of the luxury area, luxury market are. So I was just mentioning LVMH, they had, well, you know, certainly not a great quarterly called by any stretch of the imagination. The stock is in a 30% drawdown, which is, you know, it had a hell of a run. So it's hardly catastrophic. But if you look at something like Ferrari, where Ferrari has no, there's no aspirational money. in Ferrari, right?

For a second, you had the Bitcoin bros buying Lamborgadis and stuff, but by and large, the market for this type of luxury good, that just is what it is. That's not going to necessarily ebb and flow with the economy, although I'm sure rich people would think twice about buying a half a million dollar car if the economy goes down as well. Yeah, but Michael, all these millennials reaching middle age, like you that want a sports car, are going to be thinking about having that midlife crisis in a Ferrari. Think about it. No, the percentage of the population that could afford a Ferrari is very, very, very small.

Well, my question for you is, I agree with you that Apple, like, I've heard a lot of people make the case that Apple's a luxury brand, but so many people have an eye, like, if you have the blue on your phone versus the green, and it shows that you know, but so many people have an iPhone. It's luxury that it's luxury that everybody buys. Yeah, so many people have it. So how did you, so I agree with you about, like, let's take away that kind of thing that people say is luxury, but it's pretty widely you. So how did you go about defining what luxury actually is for these, these companies? It's really, you know, we like to take, like we did with KWeb, is this bottom up kind of subsector approach of actually finding these, you know, eliminating, you know, that kind of mass. I mean, and some of this is like, you know, as a developed market people, we're kind of, we're rich by a global standard just by being an American. But it's really about taking that kind of bottom up approach in terms of getting the exposure to these kind of subsectors. these areas where you're not you're you're you're basically eliminating you know this kind of these companies that a you already own so you so you don't want any more exposure to them

which i think is one of the risks that you have and you know one of the unknown risk when it comes to thematic investing is that you're just loading up on stuff you already own if it's magnet you know what's the difference between the magnificent seven and the s and p 500 today right it's you know it's really, to me, it's even about that kind of growth factor more than anything else. So it's taking that bottom-up approach from an index methodology, index methodology perspective. How does the methodology of a portfolio like this works? I would imagine this is rules-based that this is, you're not picking and guessing which ones

are going in? No, no. I mean, we're, you know, we're being very hands-on with the index provider because we want these very specific exposures. but then we're allowing an independent third party to maintain that. So that way, you know, it's not like we're influencing their decisions or, you know, we're not self-indexing. We're not trying to be bottom-up stock pickers, right?

If that was the case, you know, we'd be, you know, charging higher fees. How does the evaluations of these companies typically work? Do these companies treated a premium kind of like consumer staples? Is that how it works? Yeah, I'd say that's, you know, one of the risks to KXLY. just would be that because these companies have been growing at very high rates relative to not necessarily the U.S. growth or tech stocks, but to non-U.S. equities, they've maintained very high rates of growth. And so they are, they do have, they do trade at a valuation premium relative to

their others. So that's, you know, one of one of things we would say is, you know, the trading at a PE of 24 today versus the, you know, the S&P's at 21, right? So, so you are at a little bit of a valuation premium. And that might even explain an element of the drawdown we're seeing as, you know, higher for longer is hurting, you know, these higher valuation securities and, you know, including these luxury names. What's this Pernod Ricard? Am I pronouncing that right? Just kidding. But how do you really pronounce this thing? That sounds good to me. Most time, Michael, people are like, you know, how's your Chinese? And I always say, I'm still working on my English.

Yeah. I would imagine then the pool of consumers you're trying to tap into is the wealthy people that are coming up in Asia. But I assume most of these companies then are European base. Is that correct? Like you said, the ones that have been around for a long time? Yeah, definitely the majority are going to be your French, Swiss, Italian, and yet they're selling, you know, the majority outside of Europe, as well as tapping into, it's not

just the growing, you know, urban middle class globally, but particularly within emerging markets. I think this isn't just, it's not just a China trend. It is a broader Asia trend. It's an India. But it's also a younger, a younger wealthier that, you know, certainly. particularly one of the interesting is the demographic that, you know, this is led by female buyers, and it's also led by younger buyers, the proverbial kind of gen X, Gen Y, where they have a higher proclivity. Brian, I don't know how old you are, but Gen X is not a younger person. I'm sorry.

I have to yell a flag, yellow flag. Well, you know, as you get older, you start to move, you start moving the goal post. So between, wait, wait, I'm getting a clear. What's the generation before millennials? That's a Gen Xer, right? Yeah. Yeah, come on, dude. Sorry.

Sorry, I don't make the rules. Everything's compared to the boomers these days. Well, I'm saying, yeah, not, okay, above 50. I'm saying below, below 50. How is that? I mean, this, to me, I don't want to get, like, too into the weeds here, but this seems like it's almost like a play on human nature as well because people want to pretend like they're individualistic, but a lot of it is thinking in herds.

And it's kind of like the narrative. for a lot of these luxury brands is so powerful. And I guess the branding part of it, that it's like people are, you almost know that once you get some money, you're going to come to these brands, right? That's kind of what happens. Yeah, no, it's, and that's part of this younger generation as they're gaining wealth, particularly with the high rate of female employment and a lot of, you know, not just, you know, in China, in Asia, in the United States.

it's, you know, this is, this is, you know, their kind of go-to area to spend and then combine it with another, you know, the downside of the demographic, which is, you know, true and not just in the U.S. or China, but, you know, across the developed world is the aging population and the passing along of wealth to this younger generation. So the combination of those two factors is part of the gross story for these companies going forward. Brendan, can we talk generally about thematic investing when when people are looking to add thematic exposure, whether it's luxury or whatever the case may be? How do you talk to investors about that? It's a good question. I mean, I think, you know, in general, you know, I've always felt,

you know, ETF's supposed to do, you know, they either fall in this low beta bucket, right? You know, just get me the cheapest, low-cost, tax-efficient. And then it's supposed to be doing something that's very hard for you to do on your own, right? And that's where to me, you know, it's more of to buy a company like LVMH in France or Prado, which is actually listed in Hong Kong, it's actually really hard that, you know, my personal account is that Charles Schwab and actually tried to buy a stock in Hong Kong. I literally had to call someone. You know, I couldn't even do it online.

And so I think on thematic one, it's it's something that either you can't do on your own or you don't want to take that single stock risk. You're making more of a diversified bet on a subsector or sector. And so I think this fits really well. For me, you know, where does this fit? It's kind of, you know, within that, you know, EM has just done so poor. And that's true, that's not just true, you know, for China or it's, it's true for all non-U.S. equities, right?

I mean, I mean, you know, for us, people are like, you know, China's done terrible. You know, they're communists. They don't, they're not capitalists. Where's the lie? Well, I'm just like, but then why is EM, you know, why is EM done just as bad? Why has non-U.S. done just about as bad, right? you know, non-U.S. has lagged the U.S. by, by, you know, two-thirds. Like, is the whole world commies? You know, like, no. So to me, this is almost a play on, you know, if this, if the EM ETFs are not a good

transmission vehicle for what's happening in EM, then, like, what's a better way to do it? And I think this is, this, you know, for luxury, I think it actually comes out of your traditional EM bucket. But to be clear, but this isn't, but this is not, this is really more developed market exposure than E.M. Oh, 100%. Okay, but just want to make sure we're on the same page there, both in terms of the companies themselves as well as certainly the consumers. Like, this is, this is not, these are not emerging market consumers that are buying Ferraris. Yeah, I don't want to put words in mouth, Brenda, but you're kind of saying, I think one of the things people have missed up is like, because I remember back in like 2009, coming out of the global financial crisis, a lot of people were saying, especially the institutional world that I was in was, listen, U. Listen, U.S. growth is going to be slow.

Emerging market growth is going to be way faster, invest in emerging markets. And you're saying, well, even if they had faster growth, it didn't translate into better stock market performance. So maybe the consumption is the way that you play emerging markets as opposed to the stocks themselves. Yeah, exactly. That, you know, financials, energy, industrials, materials, materials, real estate are just such a big component in these benchmarks. And these are low, slow, no growth, value. plays, and therefore, they've been very poor transmission vehicles for GDP. And the common areas are like, oh, well, you know, the China market's done terrible,

but I'm like, it's the sector, you know, the sector, it's a sector dysfunction issue of having this huge overweight to these sectors, like energy and financials, that never grow quickly. I mean, you know, if anything, if your financial stocks are growing, really. really, really fast? Like, you probably should be really, really worried, you know, if, you know, and, you know, that, you know, history has tended to repeat itself there. So we did to talk about the types of companies that they are. We mentioned some of the names, but these, the, the industries are leather goods, jewelry, accessory, skincare, cosmetics, beverages, travel and supercar businesses,

to name a few. It's weird that beverages became like a luxury market, I guess, in certain cases. And, I mean, some of this is liquor like scotch, brandy, cognac. So the global luxury market, according to a study by Bain, is projected to double from 2020 to 2030 to $570 to $615 billion. It's hard to imagine, although crazier things have happened, it's hard to imagine the luxury market getting significantly bigger and these stocks not growing commensurate with the growth. Now, you could say, well, maybe they're priced for it, which is obviously, you know, we'll find out. But it does seem, as Ben mentioned earlier, the global luxury market is more or less up-only. obviously there's going to be dips. It's not a straight line. But spending, you know, the world

is contrary to a lot of what people, what a lot of people think. Like just objectively or at least quantitatively, it's getting better. People are spending more money. People's lives are improving. Again, obviously a general statement, but all that is true. Yeah. And it's, it's, you know, it's not just the India, China. It's, you know, I mean, I know it's what's happening in the Middle East now, But, you know, in general, UAE, Dubai, Saudi Arabia, you know, Qatar, Kuwait, you know, particularly with high oil, high natural gas prices, they're huge beneficiaries. So it's, you know, it's not just an EM Asia, you know, part of that EM is, you know, the countries that have really benefited from high commodity prices. You mentioned a few of these companies are brands that have been around forever, like, you know, hundreds of years or whatever. Are there any new up-and-coming companies in this space that are relatively new?

Well, you know, one of the bigger ones, Montcloor is, you know, from the 1950s, it was founded. It was, you know, this Swiss, you know, Swiss ski resort, you know, didn't think people were making warm enough jackets. And it kind of involved into this luxury good where, you know, it's become more of a fashion statement is, you know, where it's a bit, you know, heavily branded that, you know, it's not just that it's a, you know, well-made high quality. It's also you're, you know, kind of talking, you're telling people that you own a Montcloor. These are like the puffy coats, right? Yeah, yeah, exactly. Okay. We really don't have. We really don't have a lot of luxury brands. What's athletic rins? Well, you know, Estée Lauder is, gets thrown in,

gets thrown in the bucket, you know, that, you know, they do have, but it is, it is, it is interesting that, you know, this is, you know, I think part of it is just driven by the historical element of some of this that, you know, oh, here we go. So, so I Googled it. I mean, it takes, yeah, it takes years to decades to build a luxury brand. I would say, well, Ralph Lauren's not really luxury. It's nice, I guess. Tiffany was bought by L. No way. No way. There's no way. Ruff Lauren is luxury anymore. Maybe in like the 1980s. It used to, true, I'm showing my age.

It used to be. Is Torrey Birch luxury? Vera Wang? Yeah, I don't know if any of these are. Mark Jacobs, Kate Spade. I don't know if any of these are. Maybe they're not. I wouldn't know.

Yeah, I mean, where, you know, where we, you know, there's some discretion. You know, we felt, you know, some of the, some of the Las Vegas casinos. Part of that is not just because of the U.S., but because of their global casinos. Like in Macau. So, you know, that's something that not everyone has included in their definition that we did.

We also have Vail Resorts, which is, you know, the big, you know, they're kind of the almost duopoly in ski resorts. But, you know, at 150 bucks for, you know, lift ticket a day, you know, it kind of falls in that bucket. Remember the jumpsuits that Harry and Lloyd wore in dumb and dumber when they're wearing the ski, we're wearing the ski goggles and they're just giving out hundreds? That was, that's a luxury brand. I don't know what that was, but...

Well, that's Aspen, Aspen, right? I had to sneak a dumb and reference in here. All, Brendan, if people want to learn more about crane shares, your luxury ETF, where do we send them? Crane shares.com backslash-slash-KLXY. Perfect. All right, we appreciate the time. No, thank you, Michael. Thank you, Michael. Thank you, Ben.

Great sending you boat. Okay, thanks to Brendan. Remember, go check out craneshares.com slash KLXY to learn more about this ETF. and send us an email, Animal Spirits at thecompoundNews.com. Did I get it right again? I'm Ron Burgundy. Yes, you nailed it. See you next time.